Food delivery companies like Uber and DoorDash are suing New York City over the minimum wage law for delivery workers set to come into effect from July 12.
What does the law say<\/span>
The law, announced by New York City in November 2022, will require app-based food delivery companies to increase their delivery workers\u2019 minimum wage to $17.6 per hour. The law requires a subsequent increase in the minimum wage to $19.96 per hour by April 2025 to account for inflation.
Why the lawsuit<\/span>
The companies have filed lawsuits against the city stating that the new earnings standard policy is based on a flawed understanding of how the food delivery industry works. While Uber has sued the city independently, DoorDash and Grubhub have filed a joint lawsuit.
In a statement on July 6, DoorDash called the law a \u201cbad policy that was the result of an even worse process,\u201d and stated that the study conducted by the Department of Consumer and Worker Protection (DCWP) that initiated the new earnings standard for delivery workers was biased.
DoorDash has asked why the new law only applies to delivery services that facilitate meal deliveries but not to those that facilitate grocery deliveries.
According to reports, Relay Delivery Inc. has also sued the city stating that the new law would put the company out of business.
How it started<\/span>
The DCWP study which reportedly draws data from surveys of food delivery giants like UberEats, DoorDash, Grubhub, and Relay, revealed that delivery workers are earning approximately $11 per hour with tips, and around $7 per hour without tips.
The minimum wage in New York City is $15. However, since delivery workers are contractors and not company employees, they do not qualify for the minimum wage law.
The press release by New York City announcing the new law states that it will positively affect over 60,000 app-based restaurant delivery workers in the city.<\/div>\n