Uber, DoorDash, and Grubhub lose bid to block NYC’s new wage rules for delivery workers

New York City’s delivery workers will get a significant pay bump after a judge rejected a request by Uber, DoorDash, and Grubhub to block the city’s new minimum wage rules from going into effect.

The ruling by New York Acting Supreme Court Justice Nicholas Moyne will allow the law to go into effect, which requires companies to pay gig workers a minimum wage of $17.96 per hour. That wage will rise to $20 an hour by 2025.

Delivery worker advocates celebrated the ruling, claiming it puts them “one step closer” to earning a living wage for their work. New York City has the largest delivery workforce in the country, comprised of at least 65,000 mostly undocumented immigrants who earn less than $8 an hour after expenses.

“Multi-billion dollar companies will not profit off of the backs of immigrant workers and get away with it,” the Worker’s Justice Project and Los Deliveristas Unidos said. “This landmark victory is a stark reminder that workers will always win.”

But more hurdles could still emerge. Last July, the judge stopped the law from being implemented while he considered the companies’ request to block it until the case was resolved. And while the law will now go into effect, the companies’ lawsuit will still need to work its way through the courts.

According to the NYC Department of Consumer and Worker Protection, the new rules could force the app companies to limit their supply of workers or eliminate tipping. “The Department anticipates that the greatest adverse impacts from the rule for workers are likely to be the actions apps take to reduce platform access for workers whose time generates relatively little revenue or to alter requirements in ways some workers find undesirable,” the department said in a November 2022 report.

Here’s how the rule will work: apps can either pay workers per trip, per hour worked, or come up with their own formula, so long as the result is a minimum pay of $17.96 per hour on average (up to $19.96 by April 2025). That works out in 2023 to 30 cents per minute before tips for hourly workers or, if an app only pays by active trip minutes, approximately 50 cents per minute of trip time.

The companies argued the new rules would force them to shrink their service areas as they absorb new labor costs, which could impact their customers and make their delivery service less reliable.

“We’re disappointed with the judge’s decision to move forward with this version of the regulation and are evaluating our next legal steps,” Grubhub spokesperson Patrick Burke said in a statement.

“The City’s insistence on forging ahead with such an extreme pay rate will reduce opportunity and increase costs for all New Yorkers,” DoorDash spokesperson Javier Lacayo said. “We will continue evaluating our legal options moving forward.”

“The City continues to lie to workers and the public,” Uber’s Josh Gold said. “This law will put thousands of New Yorkers out of work and force the remaining couriers to compete against each other to deliver orders faster.”