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Uber, DoorDash, Grubhub File Suits Against NYC’s Wage Law For Gig Workers

 |  July 6, 2023

New York City was taken aback Thursday morning when Uber Technologies Inc., DoorDash Inc., and other app-based food delivery companies filed lawsuits seeking to strike down a novel law setting minimum wages for the city’s delivery workers.

The companies, joined by Grubhub Inc., claimed the law was based on a misunderstanding of how the food delivery industry works and would impose unsustainable recordkeeping requirements. DoorDash also said the city’s Department of Consumer and Workers Protection had exhibited a “fatally flawed and subjective rulemaking process”. The law, due to take effect next week, would solicit companies to pay their delivery workers $17.96 an hour, on an hourly or per-delivery basis, with the rate rising to nearly $20 in April 2025.

Uber, DoorDash, and Grubhub also warned that the law would shrink service areas and cause an increase in fees for both consumers and restaurants. Moreover, the companies claim that city officials justified the law based on “flawed studies and statistics”. In a joint statement the companies said, “This fatally flawed and subjective rulemaking process unsurprisingly worsened these already problematic policies”.

Related: EU Targets Uber, Deliveroo Gig Workers’ Policy

Relay Delivery Inc., a New York-based company, also filed a lawsuit claiming that the law will put the company out of business unless it raises fees charged to restaurants.

The three companies opposed the law and went on to sue the city, seeking to have the law permanently struck down and to block implementation while the lawsuit is pending.

Vilda Vera Mayuga, head of the city’s Department of Consumer and Worker Protection, commented on the lawsuits and said, “Delivery workers, like all workers, deserve fair pay for their labor, and we are disappointed that Uber, DoorDash, Grubhub, and Relay disagree.”

In last month’s announcement of the new law, New-York Mayor Bill de Blasio declared, “Our delivery workers have consistently delivered for us – now, we are delivering for them”. He said the new minimum salary would “guarantee these workers and their families can earn a living, access greater economic stability, and help keep our city’s legendary restaurant industry thriving”.

Supporters of the law argue that prior to the minimum wage law, the average wage for a delivery driver in New York City was about $11 an hour after expenses, which is under the city’s own minimum wage of $15 an hour. Ligia Guallpa, executive director of the Brooklyn-based Worker’s Justice Project said, “This rule will set the pay floor for all the essential deliveristas who work tirelessly – whether through a pandemic, a snowstorm or wildfire smoke – and who have been denied a living wage for far too long. While there’s still work to do, a minimum pay rate for food delivery workers will transform the lives of thousands of families across the city and deliver long overdue justice for deliveristas.”

Amidst the ongoing battle between the companies and the city, the law is due to be implemented next week. Regardless of the outcome of the companies’ lawsuit, the future of the thousands of food delivery workers in the city hangs in the balance.