Delivery service DoorDash raises fees in Seattle, citing new city regulations as the cause
Seattle, known for its tech-savvy population and vibrant food scene, has become the most expensive city in the U.S. to order food from DoorDash. The city's stringent regulations on app-based worker pay and deactivations have led to multiple service fee increases for consumers, causing operational difficulties and degraded user experience for the food delivery service.
DoorDash, a leading player in the food delivery industry, has raised delivery fees several times since early 2024. These include a $4.99 fee on all orders, a $1.99 minimum service fee for DashPass subscribers starting August 2024, and additional service fee hikes as of July 2025. These increases are a direct response to the regulatory costs imposed by Seattle.
The city's "PayUp" law requires platforms to pay gig workers nearly $30 an hour before mileage and tips, significantly above the city's minimum wage. This wage mandate substantially raises DoorDash's labor costs. Additionally, the App-Based Worker Deactivation Rights Ordinance, passed in August 2023, mandates a 14-day notice and a thorough review process before deactivating drivers. This slows operational response and adds administrative costs.
These regulations have taken a toll on DoorDash's business operations in Seattle. The company operated at a loss in Seattle in 2024 despite its large national revenue, attributing this to the combined effect of minimum wage laws, deactivation regulations, and enforcement fees imposed by the city.
The increased fees and operational difficulties have led to Seattle having the highest DoorDash delivery prices in the U.S., pricing many consumers out of delivery services. Furthermore, DoorDash reports increased delivery delays and fraud, partly due to drivers gaming the system under the current regulatory environment.
DoorDash has warned the Seattle City Council about the costs of these regulations and argued that they have resulted in decreased earnings for its drivers. The company's data shows that Seattle's pay rules have caused a 'precedented drop' in business, with Dashers receiving half as many daily delivery offers and waiting three times longer for potential deliveries. However, the Seattle City Council has not yet commented on these claims.
Despite these challenges, DoorDash is not resting on its laurels. The company is expanding beyond just meals and partnering with Pay Later service Klarna to offer flexible financing to US customers. However, it remains to be seen how these strategies will impact the company's operations in Seattle.
[1] DoorDash Investor Report Q4 2024 [2] Seattle City Council Report, August 2023 [3] DoorDash Press Release, February 2024 [4] Seattle Times Article, March 2024
- The stringent regulations set by the Seattle City Council, such as the "PayUp" law and the App-Based Worker Deactivation Rights Ordinance, have significantly increased DoorDash's operational costs, causing a rise in revenue due to delivery fee hikes.
- The economic impact of these regulations extends beyond DoorDash, affecting the city's general-news landscape as the high delivery fees resulting from these changes have impacted the lifestyle of many Seattle residents, causing challenges in accessing food delivery services.
