Three food-delivery giants, namely Uber, DoorDash, and Grubhub, are suing New York City to prevent the implementation of minimum pay standards for gig workers. The companies argue that the regulators used flawed data to determine the new compensation rules. They have filed a request for a temporary restraining order, along with Relay, a smaller New York-based food delivery platform, to halt the wage changes scheduled for July 12.
Under the proposed pay standard, gig platforms would be required to pay food delivery workers around $18 per hour, with the amount increasing to $20 per hour by 2025. Currently, delivery workers earn approximately $11 per hour according to the city’s estimate. However, Uber and other gig companies claim that they will be forced to pass on the higher wages to consumers by raising prices. They argue that the city’s modeling fails to accurately calculate the extent to which this increase will harm local restaurants. Moreover, they contend that the new system will disadvantage delivery workers as the companies will need to closely monitor their online time on the apps, potentially limiting their earnings.
Uber spokesman Josh Gold expressed the need to pause the rule before it damages restaurants, consumers, and couriers. Meanwhile, Vilda Vera Mayuga, the commissioner of New York City’s Department of Consumer and Worker Protection, defended the new wage standard, emphasizing that delivery workers deserve fair pay for their labor. She stated, “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 filed by the food delivery giants highlights the ongoing conflict between gig companies and labor activists across the US regarding worker compensation and treatment. As independent contractors, gig deliverers do not receive a minimum wage or health care benefits. While gig companies argue that workers value the flexibility of their job, labor groups argue that they are being exploited and deserve better protections.
Delivery workers themselves have long voiced complaints about inadequate compensation for their demanding and sometimes dangerous work. They often earn less than drivers who transport people. Ligia Guallpa, the executive director of the Worker’s Justice Project, criticized the lawsuits, stating that they come at the expense of workers struggling to survive in an affordable crisis-stricken city.
Some states have already established minimum pay standards for gig workers. In California, gig companies championed Proposition 22, a ballot measure that passed in 2020 and offered delivery workers a minimum wage and limited benefits while excluding them from employee classification. Washington State and Seattle also have similar laws in place. While New York’s proposed $18 per hour rate was already a compromise, Harvard Law School’s labor center worker rights lawyer Terri Gerstein believes the gig companies will face difficulties in court, as the city exhibited seriousness and care in enacting the pay standard. She suggests that Uber and others will struggle to prove that the city’s decision was arbitrary and capricious based on the available record.