In a landmark decision, New York City has dealt a significant blow to ride-hailing giants Uber, DoorDash, and Grubhub, as they are compelled to abide by the city’s groundbreaking new law, rejecting their bid to evade minimum wage requirements for delivery workers. This pivotal legislation, still pending due to ongoing legal battles, aims to secure better wage protections for app-based workers, signaling a victory for labor rights.
Once the legal dust settles, third-party delivery providers will be obligated to pay their delivery workers a minimum wage of approximately $18 per hour before factoring in tips. This rate, slated to increase every April 1, exceeds the city’s standard minimum wage, acknowledging the unique financial challenges faced by gig workers. Presently, food delivery workers typically earn an estimated $7 to $11 per hour on average.
New York Acting Supreme Court Justice Nicholas Moyne had previously put this transformative law on hold in July. At that time, Uber, DoorDash, Grubhub, and the smaller delivery service, Relay Delivery, united to challenge the city, arguing that the heightened wage requirements would adversely affect their services. With the recent decision by Justice Moyne, this law is now set to move forward. While Uber, DoorDash, and Grubhub must prepare to comply with the new regulations upon implementation, Relay Delivery will be granted additional time to renegotiate contracts with restaurants, according to Reuters.
This groundbreaking move establishes New York City as the first in the United States to mandate a minimum wage for app-based delivery workers. It sets a precedent that other cities are likely to follow, mirroring previous efforts that compelled ride-hailing apps to increase their minimum rates for drivers. In 2022, this resulted in Uber and Lyft raising their per-mile rates by just over 5 percent, aligning with the city’s commitment to fair compensation for gig economy workers.
