Uber, DoorDash, and Grubhub have failed in their attempt to avoid paying a minimum wage to their delivery workers in New York City. A judge rejected the companies’ bid to circumvent the city’s upcoming law, which aims to provide better wage protection for gig workers. Once the lawsuit is settled, third-party delivery providers will be obliged to pay their delivery workers an hourly minimum wage of about $18 before tips, with yearly increases. This move makes NYC the first US city to mandate a minimum wage for app-based deliveries, paving the way for other cities to follow suit.
The new law, still pending due to the ongoing lawsuit, will come into effect once the suit is resolved. Delivery workers in New York City will be guaranteed a minimum wage of around $18 per hour before tips. This hourly rate will increase every year starting from April 1, considering the additional expenses gig workers face. Currently, food delivery workers earn an estimated average of $7 to $11 per hour. While Uber, DoorDash, and Grubhub will have to comply with the law, a smaller delivery service, Relay, will be granted more time to renegotiate its contracts with restaurants.
New York Acting Supreme Court Justice Nicholas Moyne initially put the law on hold in July when the three companies, along with Relay Delivery, sued the city, arguing that the raised rates would negatively impact their services. However, with Moyne’s recent decision, the law will now move forward. This development makes New York City the first in the United States to introduce a minimum wage requirement for app-based delivery workers. It is anticipated that other cities may follow suit, influenced by NYC’s proactive stance in addressing wage protection for gig economy workers. Moreover, this decision builds on the city’s previous efforts to increase minimum rates for ride-hailing drivers, which led to Uber and Lyft raising their per-mile rates by just over 5% in 2022.