In a blow to Uber, DoorDash and Grubhub, a New York judge ruled Thursday to allow the $18-an-hour minimum wage for food delivery workers in New York City to be implemented.
The delivery apps sued the city in July, when the city’s 65,000 delivery workers were beginning to see hourly payments, in an attempt to block the standard’s implementation. They obtained a temporary injunction at that time. Acting Supreme Court Justice Nicholas Moyn ruled against the companies today, making room for a minimum wage rate that will reach $19.96 per hour in 2024 to account for inflation.
“Billion-dollar corporations cannot profit off the backs of immigrant workers while paying them a penny in New York City and getting away with it,” said Ligia Gualpa, director of the New York-based Workers’ Justice Project, which helped lead the advocacy effort. minimum wage, according to a statement. “The judge’s ruling is another reminder that workers will always win.”
Delivery workers are considered independent contractors and therefore do not benefit from employee protections such as a guaranteed minimum wage, workers’ compensation, or paid sick leave.
The three delivery apps said that charging higher fares would ultimately hurt the end consumer, who would suffer from higher prices. They also argued that it would hurt delivery workers by forcing companies to track the time they spend on apps without making deliveries.
“The city continues to lie to workers and the public. This law will put thousands of New Yorkers out of work and force remaining delivery workers to compete against each other to deliver orders faster,” said Josh Gould, an Uber spokesman.
Relay, a smaller New York City-based delivery platform that acts as a courier service for restaurants, also sued the city and obtained an injunction.
“Relay couriers make an average income of more than $30 per hour. Today’s decision protects these couriers and allows Relay, a local New York City startup, to continue creating opportunities for more workers,” Adam Cohen, Relay’s attorney, said in a statement. “We are grateful for Judge Moen’s well-reasoned opinion that Relay is likely to succeed in its argument that the rule did not take its unique business model into account.”
Under New York City’s mandate, businesses that employ delivery workers will choose between one of two minimum wage rate options Determined by the city. The first option requires companies to pay a worker at least $17.96 an hour, excluding tips, for time spent connected to the app, which includes time spent waiting for a gig.
The other option involves paying apps $0.50 per minute of active time, excluding trips. Active time occurs from the moment the worker accepts the delivery to the moment the food is delivered.
Uber, DoorDash, and Grubhub haven’t specified what payment method they might follow, but they could be focusing on a $0.50 per active minute option. Pay per active minute is already written into how these companies do business in many locations.
In California, where Proposition 22 is the law of the land, businesses are guaranteed to pay at least 120% of the local minimum wage for active mileage. If the minimum wage was $14 per hour, a 15-minute door-to-door delivery would earn a worker $4.20.