Uber, DoorDash, and Other Delivery Apps Will Now Have to Pay Workers a Minimum Wage in NYC
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Fun fact: delivery workers around the country often have to pay for those branded, insulated bags that they carry food orders in. Though in NYC, companies are legally required to provide bags at no charge after 6 completed deliveries thanks to protective legislation.
Uber, Grubhub, DoorDash, and their delivery app peers will soon have to pay couriers a minimum wage in New York City. The most populous U.S. metropolis officially enacted the landmark pay floor for food delivery on Sunday, as announced at City Hall by Mayor Eric Adams and Senator Chuck Schumer.
Beginning July 12, companies will have to shell out at least $17.96 per hour to delivery workers. That rate is set to rise to $18.96 by April 1, 2024, and $19.96 per hour in 2025.
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Apps will have the option to mete out the corresponding pay per trip, per hour worked (including on-call hours), or in accordance with their own formulas, according to a city press release “as long as their workers make the minimum pay rate.” The different available avenues to meeting the pay floor are available in part to allow for “multi-apping” in which workers log in and pick up delivery gigs on more than one app.
Though the citywide minimum wage is $15/hour, the higher rate for delivery workers is intended to account for their status as contract employees. Couriers, whose work is notoriously dangerous and ill-compensated, are personally responsible for their own expenses. Individual workers have to pay the cost of things like insurance and other healthcare bills in the case of on-the-job injuries as well as covering the purchase and maintenance of the e-bikes that many rely on—meaning their actual take-home pay is often much lower than their base income.
“This new minimum pay rate guarantees these workers, their families can earn a living,” said Adams over the weekend. “They should not be delivering food to your household if they can’t put food on the plate in their household. We are balancing out on both sides of the equation.”
In a statement posted to Instagram celebrating the announcement, Los Deliveristas Unidos, an organization that advocates for delivery workers, wrote: “We did it. We secure[d] a landmark minimum pay rate for 60,000 app-based delivery workers in New York City.” Los Deliveristas has been one of a handful of groups who’ve spent years working to get fair pay for couriers in New York and beyond. “This is just the beginning,” the org added.
“Today was a historic day for more than 65,000 workers who arduously do this work with determination and dedication. We will finally have a fair salary,” Queens-based worker and organizer Antonio Solís tweeted Sunday.
Seattle City Council unanimously passed legislation establishing similar wage minimums in June 2022. But that law doesn’t take effect until January 2024—making New York the first major city in the U.S. set to enforce a pay floor for food delivery workers, according to a report from The City.
NYC’s policy will more than double the average, pre-tip $7.09/hour base pay (estimated at $4.03/hour after expenses) that couriers currently bring in, according to a 2022 report from NYC’s Department of Consumer and Worker Protection. The rule follows months of contentious back and forth on the issue, including aggressive lobbying by Uber and others against a mandatory minimum wage.
However, though undoubtedly a massive improvement for delivery worker conditions, not all advocates for better pay and protections are satisfied with the new policy. An initial version of the rule, proposed in November 2022, would’ve granted couriers a base pay of $23.82 per hour, based on calculations by the Department of Consumer and Worker Protection included in the department’s 2022 report. This report and NYC’s minimum policy are both the result of legislation passed by the city council in September 2021 mandating a study of delivery driver working conditions and ushering in new protections.
Through more than a year of assessment and investigation, the DCWP determined that $23.83 would “provide parity with workers covered by NYC’s existing minimum earnings standard for app-for-hire service drivers and approximates the total compensation app-based restaurant delivery workers would receive if classified as employees.” Mayor Adams, however, opted to disregard DCWP’s findings and approve a minimum of nearly $4 less than the one originally put forth. He and the city also blew past a January 1 deadline to institute the new pay minimum.
“City Hall acquiesced to the lobbying of billion $ app companies, delaying raises owed to deliveristas & padding corporate profits off the backs of some of NYC’s hardest working NYers,” Comptroller Brad Lander posted on Twitter following the mayor’s announcement. “Delivery workers should be paid at least the minimum wage after expenses, for every hour they work including the time spent waiting for their next delivery. Today’s watered-down rule fails to require that,” he further wrote.
Lander introduced the minimum pay standard as a city council member back in 2021. By his office’s estimate, he noted the $17.96 starting minimum will still fall short of meeting minimum wage, amounting to just $12.69/hour after driver expenses.
Nonetheless, delivery companies say it is still too much. Uber and DoorDash have claimed NYC’s new policy will require the apps to raise prices and result in less schedule flexibility—allegedly harming consumers and workers, according to a report from Gothamist.
Josh Gold, a spokesperson for Uber said, “The city is lying to delivery workers,” in a statement emailed to Gizmodo. “They want apps to fund this increase by eliminating jobs & reducing tipping while forcing the remaining workers to deliver orders faster,” he added.
In another emailed statement, a Grubhub spokesperson told Gizmodo: “While we believe New York City had good intentions, we are disappointed in the DCWP’s final rule, which will have serious adverse consequences for delivery workers in New York City.”
DoorDash called the policy “deeply misguided,” in an email to Gizmodo, and noted it is exploring “all paths forward—including litigation.”
Though underappreciated and poorly paid, food delivery workers have one of the deadliest jobs in the country, according to 2021 data from the Bureau of Labor Statistics. Traffic collisions are common. Attacks and assaults—many motivated by bike theft—on delivery and other gig workers are also an unfortunate reality. In a 2021 report, nearly half of surveyed NYC couriers reported being hurt while working.
Update 6/12/2023, 6:11 P.M. ET: The photo caption has been updated to clarify that apps must provide food delivery workers insulated bags at no charge in New York City, specifically.
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