Three of the largest delivery companies sued New York City Thursday to block a rule that would set a near $18 minimum wage for delivery workers, arguing the move would negatively impact the restaurant delivery market.
DoorDash and Grubhub filed a suit jointly while Uber did so separately. The law was set to begin July 12. However, on Friday, a state judge issued the temporary halt, with another hearing set for July 31.
The contract worker protection law is the first of its kind in the U.S. and would require delivery companies to pay couriers $17.96 an hour, excluding tips, rather than paying drivers per delivery. The rate would rise annually to almost $20 by 2025.
According to an estimate from the city, New York’s 60,000 delivery workers on average earn $7-11 an hour. The city’s current minimum wage is $15 an hour.
Additionally, another payment option included in law, includes having companies pay couriers $0.50 per minute of active time, rather than the proposed new hourly wage. This covers the amount spent active on the app, regardless if deliveries are being made at the time.
DoorDash and Grubhub say that New York’s ruling could raise the fees they charge to consumers. The companies cited the city’s own estimates that the rule would lead to a $5.18 average increase in third-party delivery charges.
The delivery firms also claim the law would limit the number of workers who can work on their app to offset the higher minimum wage. Additional claims state the law would increase the number of trips completed per hour to absorb the new labor costs, forcing companies to shrink service areas “harming consumers and restaurants.”
Josh Gold of Uber said in a statement, “the city’s entire rule depends on the false assumption that restaurants make no money on deliveries, it must be paused before damaging restaurants, consumers and the couriers it purports to protect.”
April 20, 2023 – Over 2,000 food delivery workers biked from Times Square in New York City to Foley Square as part of a protest calling for improved working conditions, which included higher wages.
Meanwhile, Vilda Vera Mayuga, head of NYC’s Department of Consumer and Worker Protection, said the law will help lift thousands of workers out of poverty.
“Delivery workers, like all workers, deserve fair pay for their labor, and we are disappointed that Uber, DoorDash, Grubhub and Relay disagree,” she said. “These workers brave thunderstorms, extreme heat events and risk their lives to deliver for New Yorkers—and we remain committed to delivering for them.”
Many delivery workers have stood by the pay increase attempt, claiming their average daily pay isn’t enough to offset New York’s high living wages and expenses.
The latest pushback is part of an ongoing back-and-forth between the delivery companies and NYC stemming from a study conducted in 2021 by the city that looked at third-party delivery workers’ earnings.
Food On Demand will continue to stay updated on the matter.
