The legislature this month passed the initial review of a food delivery platform labor protection bill to safeguard the interests of delivery workers and address ambiguity over pay calculations and protections against labor exploitation.
However, proposed minimum pay rules have triggered concern over the likelihood that delivery fees would surge and orders would drop.
The bill says that the minimum pay for app-based food delivery drivers must be equivalent to 1.25 times the minimum wage and no less than NT$45 per delivery. With the minimum hourly wage to be NT$196 next year, that would mean hourly pay no lower than NT$245 for delivery workers.
Additionally, delivery workers would be paid per trip, rather than per order, meaning that batched deliveries would likely be scrapped once the new rules are implemented. Batched deliveries are common practice, as delivery platform operators assign multiple orders to one driver to increase efficiency. However, delivery workers would miss out on payments if they were to deliver multiple orders on a single trip under the new rules.
The proposed wage calculation mechanism created by the Ministry of Labor received positive feedback from some gig workers, as it would mean double protection for their income. It is a response to long-standing complaints about unsustainable wages. A national delivery workers’ union has sought “reasonable” pay, calling the pay calculation mechanisms of employers opaque and not fully reflective of the work done, as well as costs such as gasoline, and vehicle depreciation and maintenance.
However, Uber Technologies Inc warned that the proposed minimum wage rules and restrictions on batched orders could prompt a NT$20 increase in delivery fees in Taiwan, as poorer efficiency drives up costs.
Batching is essential to growth in the delivery industry and it allows Uber to make deliveries more affordable, Uber chief executive officer Dara Khosrowshahi told reporters on Monday last week during his first trip to Taipei.
The delivery sector is a highly price-sensitive market, with a 5 percent price hike likely to result in a loss of 34 percent of overall delivery service users, a Fair Trade Commission survey released last year showed. The competition watchdog last year denied Uber Eats’ proposed merger with Foodpanda.
The food delivery bill is expected to take effect as early as next year as opposition parties threw their full support behind it and plan to push it through the legislature by the end of this year.
However, the government should not rush to implement the rules and should consider a demonstration period within which inappropriate rules could be adjusted.
Some cities in the US have introduced minimum-wage laws to protect delivery worker’s rights. The government should study those cases to avoid adverse effects.
New York City in 2021 enacted a minimum hourly wage of US$7.09 for the industry and increased it to US$17.96 per hour in 2023 after the city government implemented a delivery workers’ pay protection law following separate legislation that said gig workers should not be considered contract workers. However, the changes led to a significant decrease in delivery workers’ pay, reports said.
Seattle last year enacted minimum-wage rules, but in the first few weeks, DoorDash orders declined by 30,000 in the city, while Uber Eats reported a 30 percent drop in orders, media reported.
To prevent a surge in delivery fees from reducing order volumes, the government should thoroughly analyze the cost structures in the food delivery supply chain, including platform operators, restaurants and delivery drivers.
It should carefully consider the proposed minimum-wage rules to avoid a wide-ranging controversy.
Most importantly, the proposed changes do not require app operators to improve the transparency of their pay calculations and would not cap the fees delivery apps charge restaurants, which are high and drive up delivery fees.
The government needs to consider all of these things before enacting the bill.
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