Starting next month, food delivery workers in New York will be entitled to a minimum wage, making it the first city in the US to implement such a mandate. Delivery apps such as GrubHub and Uber Eats will be required to pay their workers $17.96 per hour, in addition to tips, by July 12th. The city plans to increase this minimum wage to $19.96 per hour by 2025, with adjustments for inflation to follow.
The minimum wage in New York is $15 an hour. By setting the hourly wage for delivery workers higher than that, the city’s Department of Consumer and Worker Protection (DCWP) says it accounts for the fact that Uber, GrubHub and DoorDash classify their delivery workers as contractors, who tend to pay higher taxes and often need more. pay the work-related expenses out of his own pocket. DCWP estimates that there are more than 60,000 food delivery workers in New York who earn an average of $7.09 an hour.
The final hourly rate announced by the city Monday is lower than the $23.82 figure the agency is calling for in 2022 (PDF link). In March, DCWP revised its estimate to account for the practice of “multi-apping,” in which some workers submit more than one application at the same time. App companies including Uber and GrubHub opposed the regulation, and now that it’s finally set to go into effect, they’re still not happy about it. “The city is lying to delivery workers — they want the apps to fund the $30 hourly wage by eliminating jobs and cutting tips and forcing the remaining workers to deliver orders faster,” Uber spokesman Josh Gold told ReturnByte.
“While we believe New York had good intentions, we are disappointed by the DCWP’s final rule, which has serious adverse consequences for New York delivery workers,” a GrubHub spokesperson said. “Unfortunately, New York City chose not to work with the industry on a solution that would have benefited all aspects of the gig economy.”
How delivery apps pay their workers is up to them, as long as they meet a minimum level set by the city. Companies that pay for travel time alone must pay about 50 cents per minute, while companies that pay employees for the entire check-in time, including order wait times, must pay about 30 cents per minute without tips. The law comes into effect after New York begins enforcing a minimum wage for Uber and Lyft drivers in 2022.