DoorDash, Grubhub and Uber Eats are suing New York City over a new law that would force them to pay delivery workers nearly $18 an hour starting next week.
In two lawsuits filed Thursday in New York State Supreme Court—one by DoorDash and Grubhub and another by Uber Eats—the companies argued that the law is the result of a flawed rule-making process and that it could cripple the restaurant delivery market. They have asked a court to block the rule while their cases proceed.
Under the law finalized last month, the three third-party delivery services will have to pay couriers $17.96 an hour starting July 12. That rate will rise annually to at least $19.96 in April 2025.
The companies can choose to pay couriers an approximate rate of 30 cents for each minute they're logged onto a delivery app or approximately 50 cents per minute a courier spends actively delivering an order. Or they can choose another method that adheres to the new minimum rate.
The new rate represents a significant raise for delivery workers, who currently earn an average of $7.09 an hour, according to the city. And it poses a major challenge for delivery services, which operate on slim margins as it is. Litigation was on the table almost as soon as the law was approved last month.
Both lawsuits warn that New York’s rule will also have drastic consequences for restaurants, customers and couriers. They highlighted the city’s own estimates, for instance, that the rule would lead to a $5.18 average increase in...
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