BC's new laws could trigger ridehailing and delivery price hikes

Ridehailing and delivery companies warn of potential price hikes in BC due to new $20.88 minimum wage, working condition laws

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Earlier this week, the Government of British Columbia announced sweeping changes are coming to the labour laws governing app-based gig work after indicating last year that changes would be forthcoming following industry consultation.

This specifically covers workers on app-based ridehailing and delivery services, including Uber, Uber Eats, Lyft, SkiptheDishes, DoorDash, and others.

Starting on September 3, 2024, these companies must provide a new app-based gig worker minimum wage of $20.88, which is 120% of BC’s general minimum wage and will rise annually by the rate of inflation. This hourly wage will be applied to engaged time, which begins when a worker accepts an assignment through its completion and does not include the time spent waiting between assignments.

Moreover, if the earnings paid in a pay period do not meet the app-based minimum earnings standard for the engaged time worked, the companies will be required to top up the difference.

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The new app-based minimum wage law is amongst various new policies that address workers’ top concerns, including low and unpredictable pay, lack of workers’ compensation, lack of transparency, unfair deactivations and suspension, and tip protection.

In a statement responding to the new laws, Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade (GVBOT), says that her organization supports the new minimum wage laws and even recommended the 120% minimum wage rate to the provincial government in GVBOT’s March 2023 research report on the future of gig work in BC. The 120% rate is also in place in jurisdictions like California.

But she warns that the various new regulations as a whole could reduce the operational flexibility these services are known to have and, in effect, lead to greater costs for customers.

Higher prices could also have unintended effects, such as less demand for ride-hailing and delivery services, which could then lead to less work and lower wages for the workers.

“Companies in BC already contend with some of the highest costs and strictest regulatory and tax environments in North America. We are concerned that the new regulations will impose additional burdens and reduce flexibility, inevitably leading to even higher costs for transportation and food delivery services,” she said.

“These new regulations also risk resulting in less work for ride-hailing and food delivery workers and ultimately lower overall wages.”

The provincial government notes that these measures are a first in Canada.

These companies have resisted similar policies in jurisdictions in the United States, including Seattle, Austin, New York City, Minneapolis, California, and Minnesota.

Early this year, Uber and Lyft both indicated they would withdraw their services from the City of Minneapolis after municipal officials passed new minimum wage laws. Weeks later, a decision was made to remain in Minneapolis after the companies successfully sought a state-wide compromise on the compensation for drivers in Minnesota’s state legislature, which overrides the municipal government’s framework.

Earlier this week, a federal appeals court dismissed Uber’s petition against California’s state law that classifies its drivers as employees of the company, not independent contractors.

Uber is taking a similar stance in response to the BC government’s new policies this week, reiterating the company’s position that they “support government policies that protect the flexibility and independence of app-based work while offering tailored benefits and protections.”

The world’s largest ridehailing company emphasizes that it supports the BC government’s work to date, such as the 120% wage standard, WorkSafeBC coverage, and the new “online platform worker” category. However, it warns that the combination of the new wages, benefits, and protection costs will be passed on to customers, and there could be negative economic impacts overall.

“However, with the inclusion of an incredibly expensive expense rate, the BC government is driving up costs for residents and reducing demand for local restaurants and earning opportunities for workers,” a spokesperson for Uber told Daily Hive Urbanized upon inquiry.

“In the middle of an affordability crisis, a rideshare expense rate that is over 50% higher than the comparable rate in California is unreasonable — and we encourage the government to reconsider the consequences for British Columbians who rely on rideshare and delivery.”

Earlier this spring, Seattle City Council began the process of reconsidering its newly enacted minimum wage laws for delivery workers. When the companies increased their Seattle delivery prices to cover the higher operating costs, there was a sharp drop in customer demand, with Uber delivery workers spending an average 30% more time waiting for delivery requests after the law came into effect in January 2024. Seattle’s municipal government is now looking to reverse some of its policies as workers on the delivery apps are now reporting they earn less than before.

“We continue to support some of the measures that the government has put forward in these regulations, which preserve the flexibility that Dashers value about this work,” a DoorDash spokesperson told Daily Hive Urbanized upon inquiry in reaction to the BC government’s new laws.

“However, we remain concerned about the rushed implementation timeline and the potential unintended consequences of these new rules for consumers, small businesses, and Dashers.”

Similarly, SkipTheDishes states they have “serious concerns” with some of the BC government’s new measures, and believe the implementation in less than four months from now is rushed.

“Government overregulation, as in this case, stifles innovation and risks further driving up costs for Canadians who are bearing the brunt of these changes. These measures will only put more pressure on Canadians, exacerbating the cost of living crisis across the country,” SkipTheDishes told Daily Hive Urbanized.

“Skip has and always will advocate for couriers to maintain the flexibility they value, and we will be monitoring the impacts of these changes closely. We hope to work with the government on future amendments that will ensure the best outcomes for couriers, customers, restaurants and retailers across the province.”

Daily Hive Urbanized also reached out to Lyft but did not hear back in time for publication.

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