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By Claudia Irizarry Aponte, The City
App-based food delivery services must pay workers at least $17.96 an hour before tips in New York City, a Manhattan judge ruled Thursday, defeating legal efforts by giants Uber, DoorDash and Grubhub to stop the rule from going into effect.
The food delivery minimum wage stems from a local law that was supposed to kick off in January and whose implementation has been delayed by the city under fierce pressure from the app companies.
Only Relay, a smaller New York-based operation, is exempt under the decision from Manhattan Supreme Court Judge Nicholas Moyne, who granted the platform’s request for an injunction because it works directly with restaurants and already pays an hourly base rate. The decision allows the company to continue challenging the rule.
Because the app companies treat their workforce as independent contractors and not as employees, delivery cyclists and drivers are not entitled to either the federal or state guaranteed minimum wage. Food delivery workers on average earn $11 hourly before tips, according to estimates from the city.
Barring further legal challenges, the companies must begin paying delivery workers $17.96 an hour before tips beginning on the first day of each app’s next full pay period.
In rejecting the apps’ request for an injunction, Moyne called any harm to Uber, DoorDash and Grubhub “speculative,” noting that they will be able to pass any increases in costs on to consumers.
The decision came after the four companies, which jointly account for 99% of food deliveries in the city, filed lawsuits in July challenging the wage rules, arguing the pay obligations would cause irreparable harm to their business.
Delivery worker leaders, who had been advocating for better wages and pay standards for more than three years under the banner of Los Deliveristas Unidos, cheered Moyne’s decision and vowed to hold the companies accountable.
Sergio Ajche, a cofounder of the group who delivers for Grubhub, said on Thursday that he was “contentísimo” — thrilled — with the judge’s decision.
“For me it’s important that the most powerful of the companies lost here,” he said in Spanish. “We demonstrated that that change can happen, even if they don’t want it to.”
In the 43-page decision, Moyne also dismissed claims by Uber, DoorDash and Grubhub that the city was unfair in the way it conducted a required survey of companies and workers during its wage-setting process, as well as their claims that the law unfairly excludes third-party grocery delivery companies.
Moyne gave the city 60 days to appeal the decision.
DoorDash spokesperson Eli Scheinholtz called Moyne’s decision “deeply disappointing” and said the company is evaluating its legal options.
“The city’s insistence on forging ahead with such an extreme pay rate will reduce opportunity and increase costs for all New Yorkers,” he added, contending that the wage requirement will result in less work for drivers.
According to Grubhub spokesperson Patrick Burke, the platform will be “forced” to make changes “that will have adverse consequences for delivery partners, consumers and independent businesses.”
Relay attorney Adam Cohen, the sole company to secure an injunction, cheered the decision, saying in a statement on Thursday that Moyne’s decision “protects” their workers and restaurant partners. Relay pays workers around $13 an hour before tips.
Uber spokesperson Josh Gold slammed the decision, saying that it was “shocking that a rule designed to make third party delivery apps behave more like Relay will not actually apply to Relay.”
Nine-Month Delay
The pay standard is mandated by a 2021 law under which workers’ hourly wages will increase annually starting this year and reaching $19.96 by April 2025. The new minimum wage takes into account delivery workers’ costs of operating, from transportation equipment to insurance.
The minimum pay law was supposed to go into effect in January, but the Adams administration reversed course earlier this year, reopening the public rulemaking process following intense campaigning from several of the major delivery companies. The back-and-forth delayed the implementation of the law by more than nine months.
In legal filings and in court, the companies argued the law will force them to pass on added costs to consumers and potentially drive away business, and claimed bias by the city in the rulemaking process.
Mayor Eric Adams praised the decision in a statement that said his administration was grateful “to the deliveristas who have raised their voices in support of better pay and working conditions.” Vilda Vera Mayuga, the DCWP commissioner, said in a statement that with the ruling “New York City has reaffirmed its commitment to ensuring restaurant delivery workers earn a dignified pay.”
City Comptroller Brad Lander, who as a Brooklyn City Council member introduced the 2021 bill mandating the pay minimum, said on Thursday that he was “thrilled” by the ruling and looked forward to having workers “finally receive the raises they have been entitled to for almost 10 months.”
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.
“Multi-billion dollar companies cannot profit off the backs of immigrant workers while paying them pennies in New York City and get away with it,” Ligia Guallpa, the head of the Workers Justice Project, said in a statement on Thursday. “The judge’s ruling is another reminder that workers will always win.”
The worker-leaders 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.
THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.
I don’t believe for one minute that these four companies “jointly account for 99% of food deliveries in the city.” Maybe when it comes to app deliveries but that does that include all the deliveries still made by full-time store employees to people who don’t use apps?
I don’t use the apps and it’s great the delivery people are getting guaranteed pay but honestly I’d tip less if I knew the delivery person was making $18 or $20/hr wages plus tips.
wow , This comment seems quite detached from reality, and it’s surprising that more people haven’t voiced their disagreement with it… Express your own opinions rather than assuming what others think. Let’s break down the numbers when it comes to earning $20 an hour. Even if someone works 40 hours a week with an additional 10 hours at time and a half, that’s an estimated $1,200 per week. Laughable and Insulting !!! I still consider this to be an insufficient wage for a sustainable livelihood. how can you live on 60K a year ???? Delivery workers of NYC can still have my full support and solidarity in tipping.
You neglected to mention these are gross figures, what they actually end up with is even less.
Lower wage jobs are often treated as building blocks to gain marketable skills and get higher wage jobs. They aren’t necessarily meant to be a career. This is a slippery slope. If we start down this road with all low paying jobs, nothing will be affordable abd we’re stuck in a vicious cycle
I’m pretty sure he did voice his own opinion which I agree with.
Are you being sarcastic? A registered nurse makes around $70K.
Your comment is insulting. I live on $52k a year supporting a school age child. I am not on food stamps, snap and such and don’t live in rent stabilized apt.
Why? Drivers have to pay extra gas, insurance, supplies, maintenance, etc for uber work in addition to regular everyday expenses. Also, the tip is for good service. If they’re delivering your food in the rain, snow, heat, etc and your food still gets to you fast, that’s what the tip is for. What does their rate of pay have to do with that?
So I don’t have to tip them if it’s a beautiful day?
The restaurants that have their own websites and use their own delivery people are also listed on the apps. No one forces them to take part in it. I use GrubHub because of the 20% pre-dinner discounts, and my friends use UberEats because they build up Uber points. I don’t understand why you would start tipping delivery people less when they’re still doing the same job.
Because they make more money while we don’t? I can definitely tell you I won’t be able to afford delivery anymore. I didn’t use it much in the past either, but when I was sick with Covid I had to and I ran into a debt because of that. Now, god forbid, I’m sick again, delivery won’t be an option.
I replied to MM, why would he tip them ‘less’ when they’re still doing the same job. I didn’t suggest tipping them more.
If you play around with the apps you’ll find that most restaurants don’t charge for delivery during the day. If it’s a $1.00 delivery fee I don’t mind paying it, and the MOST I’ve ever paid was $3.00.
Pull up any restaurant’s website on the same screen as GrubHub and do a comparison. Last night I added the same items on both sites and the restaurant site was charging $5 more for the entrees, plus the delivery, and a
‘service’ charge. The GH order was $18 less and it was delivered by a restaurant employee.
Oddly, people seem to prefer a guaranteed rate of pay for their work over being dependent on tips to make ends meet!
More than likely, they are counting on higher guaranteed wages AND the same tips. I don’t think most NY’rs would feel comfortable tipping $1-$2 anymore for a delivery, so they are probably correct in their assumption. This will just lead to $40 pizzas when you factor everything in, in-line with $8k/mo rents. We can bemoan all we want, but eventually rising costs trickle down to the common person….
Great news!!!
I’m eager to hear how the app companies are going to calculate the time period for which the minimum wage applies.
Technology exists that would raise red flags if delivery people violated vehicular laws by taking illegal routes or running red lights. If their trips take less time than apps such as Google maps indicate, they should be penalized for operating in a rogue manner. The apps could integrate GPS monitoring that show the routes they take. One would think that getting paid by the time would be a disincentive to their running lights and cycling the wrong way, but they might still want to hurry up in order to get more trips because of expected tips.
“ The new minimum wage takes into account delivery workers’ costs of operating, from transportation equipment to insurance.”
Who is going to verify that a worker has insurance?
Indeed. And, when will delivery workers and their employers be required to register, license, and insure their e-bike, mopeds, et al.? (I know, very idealistic.)
Tracking/timing their routes is not a bad suggestion, either, but could be a bureaucratic nightmare, and difficult to distinguish bad delivery behavior from delivery efficiency.
Ultimately these increased delivery expenses will be paid restaurants who will pass them onto their customers.
Inevitably, many customers will cut back on their delivery orders.
Many restaurants in NYC are barely staying alive these days. This will be one more obstacle they face and this will cause more restaurants to close (not to mention more delivery people losing their jobs).
In the end it is not only “multi-billion dollar companies” who suffer but small business owners, consumers and low skilled workers who will likely lose their jobs.
NYC progressive politics at its best!
The claim made by these massive companies, that paying a living wage will result in job cuts, lost revenue and/or business closures, has been proven false each time they’re forced to do so, often in lawsuits like this. It also shows little to no decline in the number of consumers using these services. Paying a living wage not only lowers the poverty rate, it also reduces the number of ppl requiring supplementary benefits like food stamps and has shown to increase productivity, lower job turnover, and stimulates the overall economy as ppl have money to spend.
Delivery people spend a lot of time waiting for their next delivery. I never get food delivered so it doesn’t affect me, but looks like delivery charges are going to be insane . Costing more than the food itself. This is what happens when the government makes decisions for business when you have judges who have never run a business. What is it called when the government controls businesses, socialism.
“In legal filings and in court, the companies argued the law will force them to pass on added costs to consumers and potentially drive away business,”
It will not FORCE you to do anything. Just eat the costs. Your CEO will only make 20mil this year instead of 40. What a shame.
Do the math. Uber Ears had 50 million customers last year. If the CEO makes $0 each customer (not order) would pay 80 cents less. That won’t cover this wage increase.
Do you understand that businesses have a responsibility to make money? That is the sole purpose of business. They don’t just eat it, if I invest in a business I do it because I believe that business will make money for me, that is why they call it an investment. If a company cannot make money in the city of NY they don’t eat, they leave NYC. People who earn money by working smarter and harder than the next person are not evil, they are better at business and they deserve more money than the person who doesn’t. This is capitalism and it is responsible for all the success this country has ever had.
Are you telling CEO’s to eat the cost? Sure, they are listening.
plus tips? lol
“‘Multi-billion dollar companies cannot profit off the backs of immigrant workers while paying them pennies in New York City and get away with it,’ Ligia Guallpa, the head of the Workers Justice Project, said in a statement on Thursday”
It’s a matter of public record that these delivery app companies are not profitable. I don’t think this will change the trajectory of this industry in a positive way.
This is ridiculous. This just causes more inflation. The price of goods and food will now be through the roof. The companies don’t pay for these increases, the customers do.
And just like that, the large plain pizza you got delivered for dinner costs $35. Before the tip ……
I have no quarrel with delivery workers making a full wage. Across Europe servers of all kinds make a full wage — *but* do not expect the customer then to supplement their pay with what Americans call a “tip”. (Leaving some loose change, or rounding an amount up to the next five or ten euros, as a gesture of appreciation for good service is always appreciated, but rarely if ever expected.)
There is no question that the increased salary costs to the employers here (the delivery services) will be passed to the consumer. Like it or not (it’s nothing but silly to tell the CEOs of the companies to “eat” the cost increase), you and I will be paying the delivery workers their now-full wages.
But why then should we be expected to supplement their full wages with tips on the scale to which we are accustomed? If the worker is already making a full wage, why should we add another 20% to that?
The most grating thing about this lengthy article is that nearly every time a wage is mentioned, it is said to be “before tip”. If I, the consumer, am going to be paying the worker a full salary, why is it assumed that I must then supplement it by 20%?
I doubt that I am alone in this sentiment. It will be interesting to see the period during which this full-pay salary is implemented (and customers’ costs go up accordingly) and the delivery workers suddenly find themselves not getting 20% tips. It won’t be pretty.
I stopped getting delivery when I realized I was paying about double the menu costs, after taxes, fees, COVID fees, delivery charges, and tips.
I’ll walk the 3 blocks, thanks.
Delivery Apps are too expensive with all their added fees and tax. This will make them even more expensive as they raise delivery fees on top of everything else. Go ahead and use them if you want but I prefer restaurants with free delivery ( yes they do exist) and then the delivery guy gets a bigger tip from me.
I always feel sorry for the delivery people who cannot take an order directly to the buyer and have to leave it with the doorman or the front desk, because they completely lose out on tips. And so many people are unbelievably stingy when it comes to tipping delivery people, especially in bad weather. It must be a terrible job to deliver all this food and yet not make enough money to feed yourself or your own family.