New York City Sued by Uber, DoorDash and Grubhub Over $18 Minimum Wage Law

According to The Washington Post, Uber, DoorDash, and Grubhub are taking legal action to prevent the enforcement of New York City’s recently passed $18 minimum wage law for food delivery app workers. The companies are seeking a temporary restraining order to halt the implementation of the new regulations, which are scheduled to take effect on July 12th. A spokesperson from DoorDash expressed their concern about the negative consequences of this earnings standard on customers, merchants, and the delivery workers it was initially designed to assist, stating that they will not allow these impacts to go unaddressed.

The Worker’s Justice Project, which supported the study, condemned the new trial. “This latest legal action to support their business model comes at the expense of workers who are barely surviving in the face of a huge affordability crisis,” director Ligia Guallpa told the Post.

New York became the first US city to set a minimum wage for food delivery workers and ordered platforms to pay workers $17.96 an hour plus tips by July 12. The minimum wage in the city is $15 an hour, but the extra amount is because delivery workers are usually paid as contractors, so they have higher taxes and have to pay out-of-pocket expenses related to the job. NYC Department of Consumer and Worker Protection (DCWP) estimates that there are more than 60,000 food delivery workers in NYC who earn an average of $7.09 an hour.

However, DoorDash and GrubHub argued that the earnings estimate was based on a flawed methodology. Surveyed workers were told in advance that the goal was to help raise wages for delivery workers and suggested “correct” answers, according to the suit.

Grubhub also expressed concern about increased difficulty in monitoring workers. Uber said in a separate lawsuit that a higher minimum wage would raise food order prices, which would in turn hurt local restaurants.

For years, app services like Uber have fought regulations against the “gig” economy. Earlier this year, a court ruled that Uber and Lyft can continue to treat drivers as contractors instead of classifying them as salaried employees.