A New York judge has ruled in favor of implementing a minimum pay rate of $18 per hour for food delivery workers in New York City, dealing a blow to companies such as Uber, DoorDash, and Grubhub. The ruling comes after the delivery apps sued the city in an attempt to block the standard from being implemented.
Key Takeaway
A New York judge has upheld the implementation of a
8 minimum pay rate for food delivery workers in New York City, overruling the opposition from companies like Uber, DoorDash, and Grubhub. This ruling is a significant victory for worker rights advocacy groups and sets a precedent for fair compensation in the gig economy.
Background
Back in July, when the city’s 65,000 delivery workers were on the verge of receiving hourly payments, the companies obtained a temporary injunction. However, Acting Supreme Court Justice Nicholas Moyne has now ruled against the companies, allowing the minimum pay rate to be enforced. The rate is set to increase to $19.96 per hour by 2024 to account for inflation.
The ruling is seen as a significant victory for worker rights advocacy groups, who have long fought for fair compensation for delivery workers. Ligia Guallpa, the director of the New York-based Workers Justice Project, hailed the ruling as a triumph for immigrant workers and a reminder that workers will always prevail.
Impact on Delivery Workers
Delivery workers in New York City are classified as independent contractors, denying them certain employee protections such as minimum wage guarantees, workers’ compensation, and paid sick leave. This ruling, however, seeks to rectify that by ensuring a minimum pay rate for their services.
Arguments by the Delivery Apps
The three delivery apps—Uber, DoorDash, and Grubhub—argued that higher wages would ultimately harm the consumers, who would bear the brunt of price hikes. They also expressed concerns over the burden of tracking time spent on the apps without making deliveries.
Josh Gold, an Uber spokesperson, claimed that the law would lead to job losses and increased competition among remaining couriers for faster order deliveries.
Relay’s Lawsuit
In a similar vein, Relay, a smaller NYC-based delivery platform, also sued the city and was granted an injunction. Relay’s lawyer, Adam Cohen, celebrated the ruling as a victory for their couriers, emphasizing that the company’s unique business model was not adequately considered in the ruling.
NYC’s Mandate
Under New York City’s mandate, companies that utilize delivery workers will have to choose between two minimum pay rate options. The first option requires a payment of at least $17.96 per hour (excluding tips) for time spent connected to the app, including waiting time. The second option entails paying $0.50 per minute of active time, which refers to the time from accepting a delivery to dropping off the food.
Although Uber, DoorDash, and Grubhub haven’t specified their payment method, it is possible that they may focus on the $0.50 per active minute option. Paying per active minute is already a common practice for these companies in many locations.
