Instacart threatens to pull out of Seattle if new hazard pay law passes

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(Instacart Photo)

Instacart said it may not be able to continue operating in Seattle if a law requiring hazard pay for delivery workers passes next week. The grocery delivery company warned customers about the “unconstitutional legislation” in an email urging them to write to the Seattle City Council in opposition to the bill. “Your access to same-day grocery delivery is at risk,” Instacart said.

The warning comes at a time when thousands of people are using grocery delivery services to avoid exposure to the coronavirus.

The legislation Instacart is fighting would require gig economy companies to pay Seattle drivers $5 for each delivery or ride they provide, on top of their regular rates. The hazard pay is intended to offset costs and risks that drivers are dealing with during the pandemic, like acquiring protective gear and cleaning vehicles between trips.

Council members Andrew Lewis and Lisa Herbold introduced the emergency legislation in May. If adopted, it will take effect immediately. The hazard pay mandate would largely remain intact for three years after Seattle’s state of emergency over coronavirus ends.

The hazard pay would apply to gig workers who provide services in Seattle for food delivery, grocery delivery, and ride-sharing companies with more than 250 workers worldwide. A vote on the bill is planned for Monday.

Uber and Lyft expressed concerns about the bill when it was introduced. Lyft said the legislation could jeopardize drivers’ eligibility for federal relief authorized in the coronavirus stimulus packages.

Demand for Instacart’s service has increased more than 300% year-over-year as the pandemic has caused many customers to avoid traditional grocery shopping. Instacart is hiring thousands of new employees and shoppers to keep up with demand, TechCrunch reports. The company just raised an additional $225 million this week, valuing it at nearly $14 billion as it battles Walmart, Amazon, Kroger, and others.

Instacart is also dealing with unrest among its existing shoppers. Workers who deliver groceries for Instacart organized a strike in March demanding personal protective equipment and hazard pay.

Update: Instacart doubled down on its position in a statement to GeekWire:

With one careless vote, the City Council could eliminate the only affordable and accessible grocery and prescription drug delivery service in Seattle, take away flexible earnings opportunities for 5,500 people, and threaten the economic future of more than 90 neighborhood and regional stores trying to serve customers. We strongly urge the City Council to reconsider this legislation and partner with us to find a progressive solution that best serves Seattle.

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