NEW YORK, NY – Uber Technologies Inc, DoorDash Inc, and other app-based food delivery companies have filed lawsuits challenging New York City’s new law that establishes a minimum wage for delivery workers. The companies argue that the law, which goes into effect on July 12, misunderstands the nature of the food delivery industry.
Under the law, companies are required to pay delivery workers a minimum of $17.96 per hour, increasing to nearly $20 by April 2025. Companies can choose to pay workers hourly or per delivery, based on the hours logged into the app. The companies claim that the new labor costs will force them to increase the number of trips completed per hour, leading to reduced service areas and negatively impacting consumers and restaurants.
Uber, DoorDash, Grubhub, and Relay Delivery Inc argue that the law will harm their business operations. Relay Delivery Inc stated that it may be forced to increase fees charged to restaurants or go out of business.
However, the city’s Department of Consumer and Worker Protection supports the law, stating that it will help lift thousands of workers out of poverty. Supporters argue that delivery workers in the city currently earn an average of $11 per hour after expenses, well below the city’s $15 minimum wage.
The companies’ lawsuits claim that the city’s justifications for the law are based on flawed studies and statistics. They also argue that the law imposes burdensome recordkeeping requirements and violates a state law against arbitrary and capricious rules.
The lawsuits seek to block the law from taking effect and to permanently strike it down.