Food delivery workers face reduced hours and tips after NYC’s minimum wage hike: report
Food delivery workers are facing reduced hours and tips as apps like UberEats look to offset costs from New York City’s recently enacted increase to their minimum wage, according to a report.
Since the new $17.96 an hour minimum went into effect Dec. 4, delivery drivers for DoorDash, Grubhub and UberEats have seen their overall take-home pay go up, Bloomberg reported.
However, their tips, which used to account for as much as half of workers’ wages, are now between 5% and 15%, according to drivers’ pay stubs reviewed by the publication.
Before the new minimum wage, delivery workers were making about $11.12 with tips, and as little as $4.03 an hour without tips, according to a report by the city.
The decline in tips may stem from a change the delivery apps made to their platforms in which the option to tip is available only after customers have already paid for their orders. Previously, the tipping option was part of the checkout process.
Uber also plans to implement a new scheduling system next month that will cut back on the number of couriers who can work daily, according to an Uber blog post on Dec. 4.
The new rule requires workers to be paid a set hourly wage instead of a fee per trip, which means that fewer drivers will be on the road as the app companies try to contain their payroll costs.
Uber said the new scheduling system “will limit the number of couriers who can be online each hour of the day. So, unfortunately, couriers will no longer be able to go online to deliver anytime they choose,” according to the blog post.
Those couriers who have completed the highest number of trips in the previous 28 days, will get priority on the schedule, Uber said.
Uber has also tacked on an additional $2 fee for all delivery orders, while DoorDash has said it will increase customer fees in the coming months.
“Policies have consequences, and these changes come as a direct result of the extreme earnings standard imposed in New York City,” a DoorDash spokesperson told The Post on Tuesday.
Uber’s spokesperson Josh Gold added: “The city’s own study made clear that the new rule eliminates jobs, discourages tipping, and forces couriers to go faster while accepting more deliveries.”
Activists who fought for higher wages worry that workers’ take-home pay will suffer in the long run from the changes by the app firms.
“They want to send a strong message to deliveristas that if you want to earn your tip you have to work harder to make sure that the food arrives warm and faster,” Ligia Guallpa, executive director of Los Deliveristas Unidos, told The Post.
The new law also allows the app companies to pay a flat $29.93 per hour rate, paying drivers only for the time it takes to complete a trip rather than covering their idle time, which can account for up to to 40% of a shift, according to Bloomberg.
The app companies fought the higher minimum wage in court, but ultimately lost their battle in September when a New York State Supreme Court justice rejected their arguments, allowing the 2021 law to take effect.
The law calls for the minimum wage to rise to nearly $20 in April 2025.
