New York City will implement a minimum pay rate for food delivery workers on apps like Uber Eats and DoorDash—marking a first for the US. The new rule could nearly triple average earnings for app-based delivery workers in the coming years, per the AP. New York’s more than 60,000 delivery workers currently make an average of $7.09 an hour, according to the city. But on July 12, an increased pay rate of $17.96 an hour will take effect—and that minimum wage is set to rise to $19.96 by April 2025. For years following, the minimum pay rate will be adjusted annually for inflation.
Ligia Guallpa, executive director of the Brooklyn-based Worker’s Justice Project, called the move a "historic moment for New York City”—as labor organizers across the country call for better pay and improved working conditions for gig workers, who often face unreliable earnings and little safety protections. But food delivery services including Uber Eats and DoorDash have pushed back, arguing that the decision could have unintended consequences on app workers. “The city is lying to delivery workers—they want apps to fund this increase by eliminating jobs and reducing tipping while forcing the remaining workers to deliver orders faster," said Uber Eats spokesperson Josh Gold.
Grubhub, which noted it believes the city “had good intentions,” also expressed disappointment and similar concerns over the rule. Meanwhile, DoorDash said it may pursue legal action. Under the new rule, food delivery services will have some flexibility in how they pay new workers. Apps can choose if they want to pay delivery workers per trip, per hour worked, or by another policy created by the company—as long as earnings meet the minimum pay rate, the city said.
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With the $17.96 minimum rate taking effect next month, apps that pay workers for all the time they are on call (connected to the app) will be required to pay about 30 cents per minute, not including tips. For apps that only compensate for trip time, that rate will be about 50 cents per minute, not including tips, in 2023—and is expected to rise to 53 cents per minute in April 2024 and 55 cents per minute in April 2025, plus inflation adjustments. The future rate of 55 cents per minute could add up to $33 per hour of trip time, but drivers are rarely able to spend the entirety of their shifts on trips. The Department of Consumer and Worker Protection found that workers spend about 60% of their working time engaged in trips and 40% on call.
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