Uber, DoorDash and Grubhub must pay their food delivery workers at least $17.96 an hour after losing their second attempt to block New York City’s minimum wage law targeting app-based businesses.
A state appeals court ruling Thursday forces the ubiquitous delivery services to pay couriers the flat hourly rate of $17.96, plus tips, or pay per delivery at about 50 cents a minute.
The appeals court rejected the companies’ efforts to overturn a September decision by acting New York Supreme Court Justice Nicholas Moyne to allow the law to take effect, ordering Uber, DoorDash and Grubhub to pay their workers. the increased hourly rate, which will increase. to almost $20 in April 2025.
Mayor Eric Adams said the ruling was a “victory for working New Yorkers” and called the decision “a powerful tool to hold apps accountable.”
“Our delivery drivers have consistently delivered for us; Now, we are complying with them,” Adams added.
App delivery drivers in the city earned about $11 an hour on average after expenses, well below the city’s $15 minimum wage.
Because app-based delivery workers are typically treated as independent contractors and not company employees, general minimum wage laws have not applied to them.
An Uber spokesperson told The Post that the decision “eliminates jobs, discourages tipping and forces couriers to go faster and accept more rides.”
A DoorDash spokesperson said: “The sad truth is that the court chose to ignore the harmful consequences that such a misguided minimum wage rule will cause and did not justify its decision to allow the city to choose winners and losers in the way it was applies. “
A Grubhub spokesperson also weighed in: “We are disappointed with the judge’s decision and are evaluating our next steps.”
Uber, DoorDash and Grubhub first attempted to repeal the law (the first of its kind in the US) when the companies filed complaints in New York state in July, arguing that the mandate represents a misunderstanding of how the industry works. food delivery.
The companies, along with food delivery service Relay Delivery, have said the law will force them to reduce service areas to absorb new labor costs, ultimately hurting customers and restaurants.
Moyne had delayed implementing the law on July 12 while considering the companies’ request to block it until the case was resolved, but finally decided in September to move forward with the law’s minimum wage, a measure for which the companies joined forces. fight again.
Meanwhile, Uber had to shell out $290 million earlier this month to resolve allegations from the New York attorney general that its ride-sharing business has been “stealing profits” from thousands of Big Apple drivers for years.
The huge sum represents back wages, paid sick leave, adequate hiring and income notices, and other improvements to drivers’ working conditions.
Lyft was ordered to pay $38 million as part of the settlement.
New York Attorney General Letitia James said more than 100,000 drivers across New York are eligible to receive funds from the settlement, implying an average payment of $3,280.
Newer drivers who started after 2017 are not eligible for any additional payments, although James said that along with the deal, Uber and Lyft agreed to provide “new licensing benefits, pay, training and job support.”
These enhanced benefits, which include up to one week of paid sick leave per year, will go into effect no later than February 29, 2024.
Eligible drivers can file a claim to receive the additional funds they are owed, James said.
Meanwhile, ride-hailing rivals threatened to halt operations in Minneapolis if the mayor implemented a minimum wage increase with a law similar to the one passed in New York.
A new rule proposed in Minneapolis in August sought to amend its regulations for ride-sharing employees, including setting a minimum wage that says drivers must be paid at least $1.40 per mile and $0.51 per minute.
Minneapolis Mayor Jacob FreyHowever, he vetoed the mandates, which would otherwise have gone into effect on January 1, 2024.
