ÎÚÑ»´«Ã½ gig workers and consumers face an uncertain future due to new regulations.
In June, the provincial government finalized regulations to deliver fair treatment for app-based ride-hailing and delivery workers across British Columbia.
These adjustments are expected to come into effect on Sept. 3, 2024, and will apply to those working for apps such as Uber, Uber Eats, SkiptheDishes and DoorDash.
In recent years, gig workers raised concerns about the nature of their work, such as low and unpredictable pay, lack of coverage through WorkSafeBC, lack of pricing transparency, unfair account suspensions and tip protection.
Following various meetings with the provincial government and even a strike warning from several gig workers, new regulations will include:
- Establishing a minimum wage of $20.88 for workers;
- Additional compensation of $0.45 per kilometre for ride-hailing and $0.35 per kilometre for delivery;
- Coverage and compensation benefits from WorkSafeBC, including rehabilitation services from work-related injuries;
- Further destination and pay transparency;
- Prohibiting companies from withholding or deducting tips; and
- Improved suspension and termination policies.
In a news release, Minister of Labour Harry Bains said he supported these changes and highlighted the need for “basic fairness.”
“Everyone working hard to support their families should have basic protections so if they’re injured on the job, they won’t lose their homes,” said Bains. “That is what we are doing with these regulations—providing fair pay and basic protections for these workers.”
A local perspective
BIV spoke to Joy Nahirnick, a Victoria-based part-time Uber driver who said she believes the regulations—especially the new destination and pay transparency—are positive.
“Absolutely, I think they’ll be good changes,” said Nahirnick.
“Uber seems to be a fair employer; my experience with them has been lovely,” she said. “Sometimes it’d be nice to know where you’re going when you pick up a client, right? If I only have an hour, and they want to go an hour and ten minutes, I’m going to be late for another call.”
Nahirnick continued by mentioning these benefits will mostly support her colleagues who drive for the app full-time.
“There’s a few people I know that are using this as a full-time employment, and these regulations are quite helpful to them,” said Nahirnick. “What if they suddenly lost their source of income? Now they’re guaranteed a wage and they’re more protected in that position.”
However, the new regulations have raised concerns about the future of the province’s gig economy, as similar regulations in Seattle implemented earlier this year appeared to cause greater harm than good for workers.
Effects across the border
Shortly after app-based minimum pay and paid sick time ordinances went into effect on January 13 in Seattle, data from Uber showed a 30-per-cent decrease in UberEats order volumes, with delivery drivers spending 30 per cent more time waiting for delivery requests.
Data from DoorDash indicated a clear correlation, with consumers placing around 30,000 fewer orders on the app.
Independent grocers also suffered the blow of decreased demand. Washington Food Industry Association CEO Tammie Hetrick stated that digital sales for independent grocery stores fell by 10 per cent to 12 per cent shortly after the policies took effect.
This plunge in demand not only meant less work for drivers, but a decline in revenue for restaurants—many of which rely on app-based platforms for business.
According to an article by Seattle’s KUOW, Spice Waala, an Indian street food restaurant established in 2019 experienced a significant blow from the ordinances.
Uttam Mukherjee, the owner of the eatery, told KUOW that delivery orders declined by 40 per cent following the new pay rates, as companies like UberEats imposed an extra US$5 fee to each order.
Most strikingly, the price of their kathi rolls—a house best seller—doubled from US$10 to US$20 in a matter of months.
Nevertheless, some Seattle drivers reported that the ordinances positively impacted them.
According to KUOW, one delivery driver saw pay increase by 25 per cent, while another driver reported getting compensation while waiting for orders to be filled.
Ian Tostenson, CEO and president of the ÎÚÑ»´«Ã½ Restaurant and Foodservices Association (BCRFA), said he feels “cautiously pessimistic” about ÎÚÑ»´«Ã½’s new regulations.
“A lot of it is really good, such as the increase in minimum wage and the coverage from WorkSafeBC,” said Tostenson.
However, he said a real problem that could cut both ways is accounting for and reimbursing expenses.
“If I’m a driver and I’m being reimbursed per kilometre for 1,000 or 2,000 kilometres on my mileage, that’s going to cost a lot of money to these companies,” he said. “What hasn’t been factored in, is a lot of these drivers write this off on their income tax.
“The drivers that I talked to find this more beneficial, and once they’re reimbursed, that option is taken off the table. The big unknown is how much this will cost companies.”
Tostenson added that even multinational businesses are unable to survive if they have to absorb exorbitant costs.
“Ultimately someone’s going to pay, it could be our restaurants being charged a higher percentage for their service, or it could flip, and the consumers could be charged more for delivery,” said Tostenson.
“When it comes to food delivery, if we decide to skip a restaurant because it’s too expensive, we won’t get in our car and go—we’re probably going to do something else. This is a lost opportunity and we’re worried.”
When asked if Vancouver could see the same repercussions as those seen in Seattle, Tostenson said he doubts it could be any different.
“People love ordering their food in Seattle, and we have the same economic pressures as they do,” he said. “The bottom line is, there is going to be a cost increase here, and they’re going to be passed on somehow.
“I wish we’d all collectively—industry and service providers and government—done some financial modelling here.”
According to the BCRFA, consumer behaviour shifted dramatically during COVID. Pre-pandemic, overall sales from food delivery sat at 12 per cent, but have risen to upwards of 30 per cent today.
“It’s a much more important part of the market that we have to pay attention to,” he said. “We acknowledge the fact that drivers work hard, and we don’t want to lose them either. I don’t know if we’re doing it the right way here.”
BIV reached out to Uber, which responded with a news release from June.
“At Uber, we support government policies that protect the flexibility and independence of app-based work while offering tailored benefits and protections,” it stated.
“However, the ÎÚÑ»´«Ã½ government is driving up costs for residents and reducing demand for local restaurants and earning opportunities for workers. We encourage the government to reconsider the consequences for British Columbians who rely on rideshare and delivery.”
Uber has not provided exact figures regarding how much consumers will pay, stating they will review regulations closely.
The future of the province’s gig economy is difficult to predict, but experts suggest an increase in costs and a decrease in demand could be on the horizon.
