Major food delivery companies—including DoorDash, UberEats, and GrubHub— are suing New York City over a new law that raises the minimum pay rate for app-based delivery workers. The New York City Department of Consumer and Worker Protection passed the law, the first of its kind, in June, and it takes effect on July 12.
DoorDash and Grubhub filed a joint lawsuit in the New York Supreme Court, while Uber Eats filed its own in the same court. The companies argue that wage minimums will lead them to increase consumer fees, as well as limit the number of workers.
Lawyers for the companies are seeking a preliminary injunction to prevent the law from taking effect, arguing that the new wage rules mean delivery workers will receive a base compensation greater than the city’s minimum wage.
If the law is enacted, it will mandate that all delivery workers earn an estimated $19.96 an hour, a dramatic increase from the current average hourly rate of $7.09. It achieves this by requiring app-based food delivery companies to either pay a minimum hourly wage of $17.96 (not including tips) or pay workers 50 cents for every minute of their trip.
Currently, app-based delivery workers have no minimum wage floor and virtually no guaranteed worker protections, with the pay rate unilaterally determined by the company they work for. This is because DoorDash, Uber Eats, and Grubhub, don’t directly employ the workers, and instead classifying them as independent contractors.
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