Quote of the Day

When we studied what happened to delivery drivers’ earnings after Seattle’s payment rule took effect, we found that despite base pay per delivery roughly doubling, their total monthly earnings barely changed. That’s because competition among drivers for delivery tasks intensified while customers made fewer orders and tipped less on each order in the aftermath. Those effects combined washed out almost all of the intended gains.

Andrew Garin
Associate Professor of Economics, Carnegie Mellon University

Brian K. Kovak
Professor of Economics and Public Policy, Carnegie Mellon University

Yuan An
Ph.D. Student in Economics, Carnegie Mellon University

Seattle tried to guarantee higher pay for delivery drivers – here’s why it didn’t work as intended

The “laws” of economics are not as certain as the laws of physics where things are measured, and results accurately predicted out to many decimal points. But on certain topics you can count on being right out to +/- 10%. One of the things which is almost certain is the government “help” isn’t. Government can shuffle money around and make winners and losers. But in doing that they take their own share leaving less money for the people actually doing the work.

You can fight the laws of economics, but the law always wins.