The new minimum wage for food delivery app workers in New York City is being challenged by DoorDash Grubhub, and Uber Eats.
The three companies all sued the city, claiming that the law would harm delivery workers more than it would help them. DoorDash, Grubhub and Uber Eats filed their lawsuits separately to the Supreme Court of the State of New York.
DoorDash, in a statement released to CNN, called the law "bad policy" but said that it did not oppose a minimum wage to be paid to delivery workers.
We will not let the negative impacts of the earnings standard on New York City's customers, merchants and delivery workers, which it was meant to support, go unchecked. DoorDash and others warned the city repeatedly that a flawed rulemaking process would have lasting, harmful effects for New Yorkers using these platforms.
The law, announced last month, will increase the pay of app delivery workers from $17.96 an hour (before tips) on July 12 to almost $20 per hour by April 2025. The pay would be adjusted for inflation annually.
DoorDash's and Grubhub's lawsuit alleges the new regulation has legal flaws because it only targets meal-delivery and not grocery delivery services. The lawsuit also claims that the new regulation is flawed because it only targets meal-delivery services and not grocery delivery services.
According to the lawsuit filed by DoorDash and Grubhub, the New York City Department of Consumer and Worker Protection analyzed the regulation and found that it would cost an additional $5.18 on average per order.
Delivery orders are still higher than pre-Covid. The new city law was passed after the popularity of online meal delivery services soared during the pandemic.
According to an official news release issued by New York City's Department of Information, the average wage for food delivery workers is $7.09 per hr. According to the local government, there are over 60,000 food delivery employees working in the city.
New York City Mayor Eric Adams announced the law in a press release. He said that the rule will 'guarantee this workers and their family can earn a livelihood, access greater financial stability, and keep our legendary restaurant industry flourishing'.
He said, 'Our delivery staff have delivered consistently for us. Now, we deliver for them.
However, the major food delivery apps are united in their opposition.
Uber's Senior Director for Public Affairs, Josh Gold, stated that the law "must be stopped before it damages restaurants, consumers, and the couriers who are supposed to be protected by the law."
A spokesperson for Grubhub said the company "commends that the City pay attention to this problem, but that we cannot support a resolution that has unintended consequences for those who depend on food delivery."