The Appellate Division of the New York State Supreme Court has upheld legislation passed over the summer that will gradually increase the minimum wage for app-based delivery workers in New York City to $19.96, denying an appeal from the three major third-party delivery apps. The legislation — the first of its kind — will now take effect, starting with a minimum wage of $17.96 per hour. This will then increase to $19.96 when the legislation takes full effect in 2025, nearly tripling the old minimum wage of $7.09 for the independent contractors that work for the delivery apps.
DoorDash, Uber, and Grubhub initially filed their appeals against the legislation in September on the grounds that they believe they are unfairly targeted in the new minimum wage law. Under the legislation, apps can choose whether to pay their employees hourly, or only for trip time. For the latter option, these companies 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, which required 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.
The third-party delivery companies claim that the changes will make both customers and delivery workers unhappy, predicting that it will eliminate jobs (because of the exorbitant labor costs) and reduce tipping – effectively upending the system that allowed delivery workers to act as independent contractors with the flexibility to work for tips as they saw fit. In a statement about the court decision, DoorDash said that it ignores the "harmful consequences" the "misguided minimum pay rule will cause," and said that the company is now "exploring all paths forward" to figure out how to adjust their own policies in accordance with the new legislation.
A representative for Grubhub similarly stated that in response to the final ruling the company will be “evaluating next steps,” which would presumably include a re-evaluation of how delivery workers are paid. Uber also had a negative outlook on the legislation:
“While we're disappointed the city pushed through a rule that eliminates jobs, discourages tipping, and forces couriers to go faster and accept more trips, the higher wage does address another priority of the city by including enough money to purchase their own UL certified e-bikes and batteries,” an Uber spokesperson said in a statement.
Contact Joanna Fantozzi at [email protected]
