Three of the largest delivery companies sued New York City Thursday to block a rule that would set a near $18 minimum wage for delivery workers, arguing the move would negatively impact the restaurant delivery market.
DoorDash and Grubhub filed a suit jointly while Uber did so separately. The law was set to begin July 12. However, on Friday, a state judge issued the temporary halt, with another hearing set for July 31.
The contract worker protection law is the first of its kind in the U.S. and would require delivery companies to pay couriers $17.96 an hour, excluding tips, rather than paying drivers per delivery. The rate would rise annually to almost $20 by 2025.
According to an estimate from the city, New York’s 60,000 delivery workers on average earn $7-11 an hour. The city’s current minimum wage is $15 an hour.
Additionally, another payment option included in law, includes having companies pay couriers $0.50 per minute of active time, rather than the proposed new hourly wage. This covers the amount spent active on the app, regardless if deliveries are being made at the time.
DoorDash and Grubhub say that New York’s ruling could raise the fees they charge to consumers. The companies cited the city’s own estimates that the rule would lead to a $5.18 average increase in third-party delivery charges.
The delivery firms also claim the law would limit the number of workers who can work on their app to offset the higher minimum wage. Additional claims state the law would...
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