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By Claudia Irizarry Aponte, THE CITY
App-based food delivery workers in New York City will earn $17.96 an hour before tips beginning July 12, an amount that takes into account their costs of operating, Mayor Eric Adams announced Sunday afternoon.
With the rate, New York will become the first major U.S. city to establish and implement pay requirements for delivery workers toiling in the gig economy.
The hourly rate will increase to $19.96 before tips by April 1, 2025, the mayor said. The standard is a significant increase from the estimated $11 hourly workers currently earn after tips.
Because app-based delivery workers, currently estimated to number 60,000 in New York City, are classified as independent contractors and not employees, they are not currently entitled to a minimum wage. They also do not get reimbursed for expenses, such as purchasing insulated delivery bags.
The mayor made the announcement from the City Hall rotunda, flanked by Department of Consumer and Worker Protection commissioner Vilda Vera Mayuga, lawmakers and workers with Los Deliveristas Unidos, the group that campaigned publicly for three years for better pay and working conditions, including the right to use the bathroom on the job.
Deliveristas members greeted leader Sergio Ajche with an ovation as he approached the dais on Sunday.
“I feel fortunate to have been one of the people who fought for a better life for ourselves, and so that delivery workers can be finally recognized and be treated to a life with dignity,” he said.
The highly anticipated announcement caps a legislative and rulemaking process more than two years in the making. The pay scale is mandated by a 2021 local law that requires a minimum wage for workers using apps such as DoorDash and Uber Eats.
“This is the American narrative, and it’s an American story to come here and fight on behalf of what you believe is right,” Adams said on Sunday.
“Our delivery workers have consistently delivered for us — and now, we are delivering for them,” he added.
Hourly or Per Trip
The minimum pay standards were supposed to go into effect in January, but the Adams administration reversed course earlier this year, opening up the public rulemaking process again following intense campaigning from several of the major companies impacted.
The rules that go into effect in July give companies two options on how to pay workers, either hourly or on a per-trip basis where workers are paid by the minute.
The city included the two options in part to account for “multi-apping,” when workers toil for more than one platform at the same time.
Companies that choose the hourly route must pay workers $17.96 beginning on July 12 — a rate that accounts for all the time a worker is connected to the platform, including time spent waiting for trip offers and trip time. New York-based Relay is the only major player in the industry currently that already pays workers by the hour.
Those that pay for trip time — from the moment the worker accepts a delivery offer to the moment he or she drops off the delivery — must pay at least approximately 50 cents per minute of trip time, not including tips.
With the exception of Relay, the other major players in the market (Uber, DoorDash and Grubhub) pay workers on a per-trip basis. Those four companies are collectively responsible for 99% of app deliveries in the city, according to estimates from the city.
Uber, which heavily opposed the minimum pay rate proposal, outpaces them all. The company, which also owns Postmates, collects approximately 40% of sales in the city, according to a report by McKinsey & Company cited in the DCWP’s minimum pay rate report from November.
Neither Apps Nor Left Happy
For months many of the industry’s largest and most influential players lobbied against the rules, claiming that it would force them to increase prices and ultimately lead to fewer jobs for workers toiling the gig economy.
“The city isn’t being honest with delivery workers — they want apps to fund this increase by quote — ‘increasing efficiency’,” Uber spokesperson Josh Gold said in a statement on Sunday. “They are telling apps: eliminate jobs, discourage tipping, force couriers to go faster and accept more trips — that’s how you’ll pay for this.”
A representative from Grubhub similarly said the city’s rule would have an adverse effect on workers.
“While we believe New York City had good intentions, we are disappointed in the DCWP’s final rule, which will have serious adverse consequences for delivery workers in New York City,” spokesperson Liza Dee said in a statement. “Unfortunately, New York City chose not to partner with the industry on a solution that would have benefited all aspects of the gig economy.”
Doordash spokesperson Eli Scheinholtz said the company is weighing legal action against the minimum pay rules: “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.”
Gold, the Uber spokesperson, said the company hasn’t yet discussed whether it will do so. Dee, the Grubhub spokesperson, said the company would not comment on whether or not it is weighing legal action against the city.
A spokesperson for Relay did not immediately respond to requests for comment about the proposal.
Meanwhile, City Comptroller Brad Lander, who introduced the minimum pay standard bill as a council member in 2021, criticized the Adams administration for the delays and for going with the dual pay rate options, claiming it was a capitulation to the apps.
In a statement on Sunday, Lander also said the rules that will roll out this summer mean workers will still earn below the minimum wage, before tips, when their operating costs are factored in.
“Delivery workers should be paid at least the minimum wage after expenses, for every hour they work including the time spent waiting for their next delivery. Today’s watered-down rule fails to require that,” he said.
“Hidden under regulatory double-speak, the rule’s average base wage for a deliverista will be just $12.69 per hour after expenses this year, according to our office’s calculations.”
What’s Next?
But the jubilant Deliveristas who gathered at City Hall on Sunday say they’re looking ahead. In recent months, Los Deliveristas Unidos and its parent organization, the Workers Justice Project, had begun laying the groundwork to educate workers and consumers on the new rules and workers’ rights to pay.
The worker-leaders, Ajche said, will focus their efforts in the coming months to ensure the minimum pay rates are being duly paid out to workers and to educate workers on how to make complaints to the DCWP and other regulatory agencies should problems arise.
“We’re happy, we’re relieved and we’re hopeful,” Astoria worker Antonio “Toño” Solís, 36, told THE CITY. “This can only be good for us, and we will continue fighting back against the companies who say this will cause more harm than good. The real work begins now.”
The Deliveristas will also continue their efforts to plan the newsstand charging “hubs” championed by Adams and Senate majority leader Chuck Schumer, a close ally of the Deliveristas who secured the federal infrastructure funds for their hubs’ development.
Schumer, who spoke at City Hall in a guayabera after making an appearance at the city’s annual National Puerto Rican Day Parade, said the Deliveristas were “one of the most exciting and extraordinary examples of new labor organizing in the country.”
Outside City Hall after the announcement, the workers debated where to get a celebratory slice of pizza.
“Today, we celebate,” said Workers Justice Project executive director Ligia Guallpa. “Tomorrow we’re going to hit the streets, to organize workers, and to make sure that every worker in our city knows what their rights are.”
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There are so many drivers and many of them are idle (based on my unscientific, self-observations). Who is paying the new hourly rate?
Relatedly, I think one of the reason the current take-home is $11.00 is there are too many drivers and not enough gigs. If the city was to put a limit /license on the number of drivers, their utilization and pay would increase (exactly what Mayor Bloomberg did with the central park pedicab drivers).
I’m curious how this initiative and its unintended consequences will ultimately play out.
I don’t order for delivery often but historically I tipped very generously as I understood that the delivery workers had almost zero base salary so that was how they were paid. I now feel much less of an urge to do so.
For restaurants closer to me, I often just walk over and pick it up myself. Perhaps restaurants will start offering price savings for those who do so as it will allow them to hire fewer delivery people. I also try to order directly from the restaurant so they get the full amount rather than giving some to Grubhub or whoever else.
I also hope that now that they are being paid much more, delivery riders will be much safer on bikes. They are very dangerous and there do not seem to be any consequences.
I’ve historically tipped very generously as well knowing how underpaid they were. I too will likely cut that rate back significantly at this point.
Juan, I 100% agree with everything you say. I pretty much limit my takeout to walking distance, and I go get it myself. I know there are plenty of reasons (busy family with kids, disabled) people can’t pick up their own takeout food, so good this option exists, but I also know New York already had a food delivery culture before these apps, where delivery people were on staff. I NEVER use an app, always call the restaurant directly. We need to just boycott these useless apps. I have also noticed some of my favorite long-time neighborhood restaurants now have multi-tablet control centers set up monitoring incoming app orders, which is surreal to me.
Most restaurants charge more for items sold via uber, grubhub, so the “savings” is already baked in.
The Village Sun notes the age demographics of app-delivery users, per 2020 data.
“Ironically, it’s younger New Yorkers — the city’s most able-bodied dwellers — who are kicking back and leading the way, by far, on app-delivery ordering. According to an analysis of Uber Eats customers by DrinksFeed in 2020, Generation Z and Millennials — basically, age 42 and under — make up almost two-thirds of all restaurant delivery-app users. Among earlier cohorts, Generation X accounts for around 20 percent of users, while Baby Boomers and the so-called Silent Generation, make up just 11 percent and 6 percent, respectively.“
Great news. Certainly approaching a living wage. Tips can become more discretionary.
Wonderful! Always support the workers! Now let’s work to get our delivery friends a full benefits package, health and pension, etc. Just one thing though: please keep the bikes off the sidewalks, obey the traffic rules, and respect the pedestrians, thanks
Good news. Now, perhaps, as they will be making a living wage, they can slow down, obey red lights & get off the sidewalks.
So we will have to pay more for the delivery and the delivery will take longer to reach us.
This is great for deliversistas, but not so good still for the pedestrians who risk their lives everyday avoiding being hit by their speed, and lawlessness. The wage increase will not stop them from their need for fast reckless driving to insure they make enough in tips.
The article says nothing about registering their vehicles and having visible license plates. Many have been involved in hit-and-run accidents resulting in serious injury to pedestrians. The drivers are virtually untraceable or held to account. Same goes for traffic violations.
They should have thrown in mandatory liability insurance for bike owners, something to do with the extra money they are receiving. It’s supposed to cover ‘operating costs’, after all.
I’m concerned that this will increase the cost of food for our neighbors who rely on these delivery services. I suggest that there be an increase of food subsidies for vulnerable populations which can be funded by a tax on the vendors.
What’s not being covered is the opposition from delivery workers to this minimum wage. There are a lot of delivery workers concerned that they will not be allowed to work multiple apps at once or that they will be required to show legal work authorization. There are facebook groups documenting this too: https://www.facebook.com/groups/2309635352551022
Cost of the meals will increase to cover these costs. Less people will order the meals for delivery if they are watching their $$ and then these delivery people will lose their jobs.. Everything will go up so $18 won’t be worth what it is today. Money doesn’t grow on trees.
I will pay much less in tips if I tip at all anymore. The restaurants and apps have the gall to add a service charge on top of delivery. Enough.