Uber, DoorDash and Grubhub argued that the city used poor data to calculate how much food delivery workers should earn and that the change would hurt consumers.
Three food-delivery giants are suing New York City to block minimum pay standards for gig workers, arguing that regulators used faulty data to calculate the new compensation rules.
Uber, DoorDash and Grubhub on Thursday each filed a request for a temporary restraining order in State Supreme Court in Manhattan to stop the wage changes from going into effect on July 12. Relay, a smaller, New York-based food delivery platform, did the same.
The new pay standard, which was announced last month, would require gig platforms to pay food delivery workers about $18 per hour and to increase that amount to $20 per hour by 2025. Delivery workers currently make around $11 an hour, according the city’s estimate.
But Uber and the other gig companies say they will be forced to pass on the cost of the higher wages to consumers by raising prices. They argue that the city’s modeling does not correctly calculate the degree to which these higher prices will harm local restaurants. And they say that the new system will work to deliverers’ disadvantage because the company, to control costs, will have to strictly monitor how much time they spend online on the apps but not actually doing deliveries.
“The rule must be paused before damaging the restaurants, consumers and couriers it claims to protect,” Josh Gold, an Uber spokesman, said in a statement.
In a prepared statement, Vilda Vera Mayuga, the commissioner of New York City’s Department of Consumer and Worker Protection, defended the new wage standard.
“Delivery workers, like all workers, deserve fair pay for their labor, and we are disappointed that Uber, DoorDash, Grubhub and Relay disagree,” she said. “These workers brave thunderstorms, extreme heat events and risk their lives to deliver for New Yorkers — and we remain committed to delivering for them.”
The lawsuit was earlier reported by The Wall Street Journal.
The skirmish over delivery worker pay in New York is part of a long-running conflict between gig companies and labor activists around the country over the compensation and treatment of the workers. Gig deliverers are independent contractors, meaning they do not earn a minimum wage or health care benefits and are responsible for their own expenses. Uber and other gig companies say the workers value the flexibility of setting their own hours and being independent, but labor groups argue that they are being exploited and deserve better protections.
Delivery workers themselves have long complained that they are not fairly compensated for the arduous and occasionally dangerous work of ferrying passengers and food around cities for hours each day. In general, food deliverers tend to earn less money than workers who drive people.
Ligia Guallpa, the executive director of the Worker’s Justice Project, a labor advocacy group that pushed for the law, called the lawsuits “unconscionable,” adding that the legal maneuver “comes at the expense of workers who can barely survive in a city facing a massive affordability crisis.”
Some states have already enacted minimum pay standards. In California, gig companies backed Proposition 22, a ballot measure passed by voters in 2020 that offered delivery workers a minimum wage and other limited benefits while precluding them from being classified as employees. The Washington State Legislature passed a similar law last year, and Seattle has had a minimum wage law for gig deliverers since 2020. Earlier this year, Minnesota’s legislature passed a bill guaranteeing a minimum wage for gig drivers, but Uber and Lyft threatened to leave all or part of the state in response, and the state’s governor, Tim Walz, vetoed the legislation.
In New York, the $18 per hour pay rate was already a compromise, after an earlier plan to pay delivery workers $23 per hour was abandoned. Terri Gerstein, a workers’ rights lawyer at Harvard Law School’s labor center, said she thought the gig companies would face an uphill battle in court.
“The city was very serious and careful in enacting this pay standard,” she said. “Uber and other companies have to show that the city was ‘arbitrary and capricious’; based on the record, it will be very hard for them to do that.”
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