New York City has passed a minimum wage law for restaurant delivery workers — the first of its kind in the country — that would require app-based food delivery platforms to pay their delivery workers $19.96 per hour, which is almost triple the current $7.09 average rate.
The city’s mayor, Eric Adams, announced Sunday that the new minimum wage would affect app-based restaurant delivery workers that drive or bike-ride over food orders to restaurant customers and that Grubhub, Uber Eats, DoorDash, etc. would have flexibility in how they pay delivery workers the new minimum wage – either paying them per trip, per hour, or via their own formula.
“‘Getting Stuff Done’ for working people is what this administration is all about, and that includes some of the hardest working New Yorkers: our delivery workers,” Adams said in a statement. “Our delivery workers have consistently delivered for us — now, we are delivering for them. This new minimum pay rate, up by almost $13.00/hour, will guarantee these workers and their families can earn a living, access greater economic stability, and help keep our city’s legendary restaurant industry thriving.”
The pay rate will be incrementally raised, starting at $17.96 when the law takes effect on July 12 (0r $.30 cents per minute), and will increase to $19.96 when it is fully phased-in on April 1, 2025, and the pay rates will receive incremental increases based on inflation after that.
Meanwhile, apps that pay their delivery workers only for trip time (from the time a delivery person accepts a delivery to the time they finish dropping off an order), would have to pay approximately 55 cents per minute, which adds up to $33 an hour -- more than double the city’s current minimum wage rate for other workers.
This new requirement is a direct result of the law passed by the City Council in Sept. 2021 requiring the New York City Department of Consumer and Worker Protection to study the pay and working conditions of delivery workers and establish a minimum wage.
Two years later, the decided upon minimum wage rate, according to DCWP commissioner Vilda Vera Mayuga, takes into account out-of-pocket expenses including gas and other transportation costs, and the fact that independent contractors usually do not have access to workers’ compensation insurance or PTO and also pay more in Medicare and Social Security.
The third-party delivery platforms were unsurprisingly unhappy with the minimum wage requirements put in place by New York City, claiming that the new rule takes away the company’s flexibility in how they pay delivery workers on the platform, and could lead to some unpopular changes made to the apps on the delivery worker’s side.
"The city is lying to delivery workers — they want apps to fund this increase by eliminating jobs & reducing tipping while forcing the remaining workers to deliver orders faster,” Josh Gold, senior director of communications with Uber, told Nation’s Restaurant News.
Uber pointed out that the New York City government study itself predicts that the “greatest adverse impacts from the rule” will be that apps will get reduce their workforce to get rid of drivers “whose time generates relatively little revenue” and average deliveries per hour is projected to increase from 1.6 to 2.5 per hour. Meanwhile Grubhub’s spokesperson mentions that the rule will have “serious adverse consequences” and DoorDash predicts that this rule will not be popular with workers:
“Today’s deeply misguided decision by the DCWP ignores the unintended consequences it will cause and sadly will undermine the very delivery workers it seeks to support,” a representative with DoorDash said in an emailed statement sent to Nation’s Restaurant News. “Given the broken process that resulted in such an extreme final minimum pay rule, we will continue to explore all paths forward — including litigation — to ensure we continue to best support Dashers and protect the flexibility that so many delivery workers like them depend on.”
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