Instacart Sues New York City to Block New Grocery Delivery Laws

Instacart is suing New York City over the city’s new laws that will govern grocery delivery workers’ pay and tips.

The lawsuit targets Local Law 124, Local Law 107 and other grocery delivery laws that are set to take effect on Jan. 26, Reuters reported Tuesday (Dec. 2).

The laws require companies to offer grocery delivery workers that same minimum pay that restaurant delivery workers are eligible for, require companies to give consumers the option to tip at least 10% of the purchase price or manually enter the amount of the tip, and require other recordkeeping and disclosures, according to the report.

Instacart said in a Tuesday blog post that the laws threaten to eliminate earnings opportunities for 40% of Instacart shoppers in the city, increase grocery delivery costs for consumers, and reduce sales for local grocers.

The company said that when a similar law affecting restaurant delivery workers took effect in 2023, about 40% of those workers lost access to work.

“We believe everyone who earns through Instacart deserves fairness, respect and opportunity,” the company said in its post. “That’s why we’ve continued to advocate for a compensation model that reflects the realities of flexible work and empowers New Yorkers to continue to earn income on their terms.”

Instacart also said that New York City’s laws violate federal law that preempts cities from regulating the prices, routes and services for motor carriers that transport goods, as well as state law that regulates this area.

“Simply put, the City cannot ignore federal and state law to write its own set of rules,” the company said in the post.

When announcing that Local Law 107 became law in August, the New York City Council said that this and other new laws provide “critical protections” for food and grocery delivery workers.

“As the delivery sector continues to grow, it remains critical for our city to expand protections for delivery workers that protect them from exploitation in order to have a sustainable industry,” New York City Council Speaker Adrienne Adams said in an Aug. 14 press release. “All contracted delivery workers provide essential labor, and they deserve fair workplace safety and pay standards, as we address broader safety and quality of life issues in our communities caused by delivery app corporations.”