Deliveristas rally outside New York County Courthouse ahead of a hearing about minimum app pay rates, Aug. 3, 2023. Ben Fractenberg/THE CITY
By Claudia Irizarry Aponte | September 28, 2023
Judge affirms city rules mandating at least $17.96 an hour before tips for Uber, Grubhub and DoorDash workers, clearing New York as the first major U.S. city with a guaranteed driver wage.
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.”
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.
This story was published by THE CITY on September 28, 2023.