A recent ruling by Acting Supreme Court Justice Nicholas Moyne requires Uber, Grubhub, and Doordash to pay food delivery workers in New York City a minimum of $18 per hour. This decision allows the city’s stalled minimum wage plan to move forward despite numerous lawsuits filed by the delivery giants.
The ruling overturns a temporary injunction that the delivery companies had obtained in July, which had delayed the implementation of the minimum wage plan. Now, Uber, Doordash, and Grubhub must choose between paying their workers at least $17.96 for every hour spent connected to the app, excluding tips and regardless of the number of deliveries made, or paying $0.50 per minute of “active time,” which begins when an employee accepts an order and ends when it is delivered.
However, it’s important to note that not all delivery services are affected equally by this ruling. Relay, a New York-based platform, claimed to have secured an injunction through its lawyer, stating that their food deliverers already earn over $30 per hour on average.
One crucial issue highlighted in the ruling is the fact that delivery workers are typically classified as independent contractors. As a result, they do not automatically receive the same worker protections as traditional employees, such as worker’s compensation, healthcare and retirement plans, or paid sick leave.
While the federal minimum wage of $7.25 applies to all non-tipped workers, including independent contractors, food deliverers often receive a significant portion of their pay in tips. Worker advocates argue that this reliance on tips allows employers to withhold wages, especially when payments are made through a digital app rather than in cash.
It’s worth noting that New York City’s 65,000 food delivery workers only gained the right to know the tip amounts from customers at the beginning of this year. Additionally, they successfully secured a requirement for the apps to apply for licenses from the city’s Department of Consumer and Worker Protection.
The Workers Justice Project, an organization that played a vital role in securing these concessions for delivery workers, hailed the recent ruling as a victory for workers’ rights. They emphasized that “workers will always win” and warned that “multibillion-dollar companies cannot profit off the backs of immigrant workers while paying them pennies in New York City and get away with it,” according to Ligia Guallpa, the group’s director.
On the other hand, the major delivery apps, including Uber, Grubhub, and Doordash, have consistently opposed increasing minimum wages, claiming that it would ultimately burden consumers by forcing them to pay more for their orders. Uber spokesperson Josh Gold argued that the new law would lead to job losses and increased competition among remaining couriers to deliver orders faster.
In related news, California also announced on Thursday that all 500,000 of the state’s fast food workers must receive a minimum wage of $20 per hour, starting from April. The state has already implemented a requirement for food delivery apps to pay workers at least 120% of the local minimum wage for active time.
Overall, the recent ruling in New York City serves as a significant step towards fairer compensation for food delivery workers, highlighting the ongoing challenges faced by the gig economy and the need for stronger worker protections.