Updated Jan. 16: Includes company statement, effective date of new law
The company is raising its fees for Seattle customers due to the increase in operating costs resulting from passage of an ordinance by the Seattle city council.
The new law also includes requirements for companies to obtain a network company license, sets minimum wages, and provides more job security to gig workers by requiring a 14-day notice of deactivation.
The ordinance aims to generate $2.1M per year.
To offset the costs, Instacart said it will raise fees for customers inside Seattle and eliminate perks like heavy pay, peak earning times, and Instant Cashout for workers.
“Due to new regulations imposed by the Seattle City Council, we’re making several changes to how Instacart operates in Seattle [including] reduced service options and pricing increases for customers, as well as pay changes for shoppers,” the company said in a statement to Seeking Alpha, adding, “[Instacart] will work to deliver the best customer and shopping experience despite the limitations…and we may need to make additional changes in response to these new set of laws.”
Customers outside of Seattle will no longer be able to order from stores within the city.
Instacart shares were up more than 3% on Tuesday.
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