The wage rule requires delivery firms to pay workers $19.96 an hour by 2025, the latest development in regulatory battles between aggregators and the city.
Grubhub, DoorDash and Uber are suing New York City over a rule that mandates $17.96 minimum hourly pay for delivery workers starting July 12, according to court documents viewed by Restaurant Dive. This wage floor will jump to $19.96 per hour in 2025.
DoorDash and Grubhub filed a complaint jointly in the Supreme Court of the State of New York for the County of New York (Manhattan) to enjoin, then vacate and annul, the rule. Uber filed its complaint separately, The Wall Street Journal reports.
The suit filed by DoorDash and Grubhub argue the New York City Department of Consumer and Worker Protection “unlawfully” excludes grocery delivery companies when calculating the rule’s minimum wage. The suits also allege that various hourly charges selected to compensate for benefits denied to independent contractors were calculated in an arbitrary fashion.
This marks the latest development in an ongoing conflict between delivery platforms and major jurisdictions, as some states and cities seek to raise pay and strengthen worker protections and aggregators fight to constrain labor costs.
The suit continues battles over wages, on-call time
The lawsuits were filed several weeks after Mayor Eric Adams and DCWP Commissioner Vilda Vera Mayuga announced the final version of the minimum pay rule on June 11. A previous proposed version of the rule was scrapped after industry opposition and the target wage implemented in this month is 16% lower than that first, proposed wage goal. At the time, DoorDash and Grubhub pledged continued opposition, including legal action, which has now come to pass.
In the June announcement of the wage rule, the city said the rule was one part of “holistic approach to improving working conditions for delivery workers,” that would result in workers making nearly three times more per hour than before the rule’s implementation. Key to that is the requirement that delivery companies pay workers for on-call time, meaning time in which workers are connected to the delivery app but not fulfilling deliveries.
DoorDash and Grubhub argued such a requirement would result in companies paying workers for periods of time in which no deliveries were completed, and argued the city should have used a formula designed to pay only for on-call time that corresponds to the time workers spend waiting for orders they accept.
The companies threatened that without an injunction against the minimum wage rule, they may “force workers to schedule delivery blocks; restrict workers from rejecting offers; automatically disconnect workers’ access during inactive periods or travel outside of busy areas; or eliminate platform access altogether for workers who reject too many offers,” to avoid higher labor costs.
View Original Article
