In Blow To Uber, Grubhub, & Doordash, Court Rules Food Delivery Gig Workers Must Be Paid At Least $17.96/Hour

In what we're sure will be  a blow to the bottom lines at Uber Technologies Inc., DoorDash Inc. and Grubhub Inc., all three companies now have to pay New York food delivery workers at least $17.96 an hour.

The new rule comes as a result of the companies failing to win their case on appeal to block the minimum pay rule for their workers, Bloomberg reported last week. 

An appellate court in the state, on Thursday, upheld a previous ruling from September by a judge, despite attempts by the companies to overturn it. The decision had been on hold pending the court's ruling and, as a result, delivery services are now mandated to pay their couriers either a standard hourly wage or an alternative payment of approximately 50 cents per minute per delivery.

As Bloomberg notes, this mandate for increased compensation is part of a broader initiative by New York and other major cities to regulate digital platforms offering ride-sharing, food delivery, and short-term rental services, which have seen a surge in use.

Obviously, for cost reasons, gig delivery companies have actively resisted such regulations, including legal challenges against limits on the fees they can charge restaurants and mandates to disclose customer data to the restaurants they work with.

“This minimum pay rate will guarantee our delivery workers and their families can earn a living and keep our city’s legendary restaurant industry going strong," Mayor Eric Adams said. 

Josh Gold, Uber’s senior director of public policy and communications, said that the higher wage: “eliminates jobs, discourages tipping, and forces couriers to go faster and accept more trips.”

A Doordash spokesperson also spoke out against the ruling: “The sad truth is that the court has chosen to ignore the harmful consequences such a misguided minimum pay rule will cause. We will continue to explore all paths forward to ensure these minimum pay rules work for everyone who uses these platforms in New York City.”

Grubhub said it was “disappointed with the judge’s decision and are evaluating our next steps.”

This new regulation also includes a provision for a further wage increase to nearly $20 per hour by April 2025 for the city's estimated 60,000 app-based delivery workers, Bloomberg wrote. Currently, these workers earn an average of about $11 per hour, considering tips and expenses, in contrast to the city's minimum wage of $15 per hour.