Bloomberg Línea — The law that seeks to raise the minimum wage for food delivery drivers in New York City is facing a legal hurdle, with the proposal having been opposed with a lawsuit by Uber Eats, DoorDash and other apps.
The law will go into effect next week and states that companies must pay drivers at least $17.96 per hour or an equivalent rate per delivery. There are 65,000 app-based delivery workers in New York City.
The companies are seeking a temporary injunction, arguing that the new rate was calculated using flawed data. Currently, “delivery workers” earn an average of about $11 per hour, several dollars below the current minimum wage of $15 in New York.
In addition, the law would raise the minimum delivery driver wage to $20 by 2025.
New York City’s new rules will give companies the option of paying workers by the trip or by the minute.
Delivery drivers are typically treated as independent contractors rather than employees, meaning regular minimum wage laws do not apply to them. However, this law, passed in 2021, is the first in the country to establish a specific minimum wage for delivery workers.
Such workers do not receive benefits despite the difficulties they face navigating city traffic, climbing stairs or navigating dangerous areas.
Relay Delivery Inc, another food app, also filed a lawsuit alleging that the new minimum wage requirement for delivery workers would drive the company out of business.
In May, DoorDash reported revenue of $2.04 billion for the first quarter of 2023, up 40% from the same period last year. Uber Eats, which receives a 30% commission on each item delivered, reportedly generated $11 billion in revenue in 2022, according to the New York Daily News.
A half-won battle
The wage increase obtained by the delivery workers represented by the organization Deliveristas Unidos and other groups is only the first step in a struggle that demands $30 per hour, since being considered self-employed, such workers also do not have access to labor rights such as health coverage and life insurance.
The rules approved in September 2021 by New York City’s council not only set a minimum wage, but also elementary improvements in their conditions, such as: the right to use a restroom in restaurants where delivery workers pick up food, that companies report the amount of tips given by customers and the detail of the total payment received by the worker.
In addition, delivery drivers were given the right to choose which distances to drive or which delivery zones to avoid on their routes without being subject to suspensions or blocking of their accounts.
There’s a reason New York is taking the lead, wrote Stephanos Chen in The New York Times. “Perhaps more than any other American city, New York relies on a growing army of delivery drivers who have faced successive waves of Covid, extreme weather and toxic air as remote work has reshaped the economy.”