A judge has rejected the bid by Uber, DoorDash, and Grubhub to avoid paying minimum wage to their delivery workers in New York City. The pending law aims to ensure better wage protection for app-based workers, and once the lawsuit is settled, third-party delivery providers will have to pay their workers a minimum wage of approximately $18 per hour before tips. This amount will increase every year, starting from April 1, taking into account the additional expenses faced by gig workers. Currently, food delivery workers in the city make an estimated average of $7-$11 per hour.
New York Acting Supreme Court Justice Nicholas Moyne had previously put the law on pause in July when the three companies, along with Relay Delivery, sued the city. They argued that the raised rates would negatively impact their services. However, with the latest decision, the law will now move forward. While Uber, DoorDash, and Grubhub will have to comply once it takes effect, Relay Delivery will be given additional time to renegotiate its contracts with restaurants.
This decision makes New York City the first in the United States to require a minimum wage for app-based deliveries. It is expected that other cities will follow suit. The city has previously pushed for higher minimum rates for ride-hailing apps, which led Uber and Lyft to increase their per-mile rates by just over 5% in 2022.