Three food suppliers are suing New York City for blocking minimum wage standards for gig workers, arguing regulators used flawed data when calculating the new pay rules.
Uber, DoorDash and Grubhub each filed a request for an injunction in the Manhattan Supreme Court on Thursday to prevent the July 12 wage changes from taking effect. Relay, a smaller New York-based grocery delivery platform, did the same thing.
The new wage standard, announced last month, would require gig platforms to pay caterers about $18 an hour and increase that amount to $20 an hour by 2025. The city estimates delivery workers currently make about $11 an hour.
But Uber and the other gig companies say they will be forced to pass on the cost of higher wages to consumers through price hikes. They argue that the city’s modeling does not correctly calculate how much these higher prices will hurt local restaurants. And they say the new system will work to the detriment of couriers, as the company needs to tightly monitor how much time they spend online using the apps, but not on the actual delivery, to control costs.
“The rule must be suspended before harm is done to the restaurants, consumers and couriers it claims to protect,” said Josh Gold, an Uber spokesman, in a statement.
In a prepared statement, Vilda Vera Mayuga, the New York Department’s Commissioner for Consumer and Labor Protection, defended the new wage standard.
“Delivery workers, like all workers, deserve fair compensation for their work and we’re disappointed that Uber, DoorDash, Grubhub and Relay disagree,” she said. “Fending through thunderstorms and extreme heat events, these workers are risking their lives to deliver for the New Yorkers – and we remain committed to delivering for them.”
The Wall Street Journal previously reported on the lawsuit.
The dispute over delivery workers’ pay in New York is part of a long-running dispute between gig companies and union activists across the country over workers’ compensation and treatment. Gig suppliers are independent contractors, meaning they do not receive minimum wage or healthcare benefits and are responsible for their own expenses. Uber and other gig companies say workers value the flexibility to set their own hours and be independent, but unions argue they are being exploited and deserve better protection.
The delivery workers themselves have long complained that they are not adequately remunerated for the tedious and sometimes dangerous work of moving passengers and groceries around cities for hours every day. In general, grocers tend to make less money than drivers who drive people.
Ligia Guallpa, executive director of the Worker’s Justice Project, a labor rights group campaigning for the law, called the lawsuits “unscrupulous,” adding that the legal maneuver is “at the expense of workers who live in a city that is associated with… facing a crisis can barely survive.” massive affordability crisis.”
Some states have already enacted minimum wage standards. In California, gig companies supported Proposition 22, a ballot measure passed by voters in 2020 that offered delivery workers a minimum wage and other limited benefits, but at the same time barred them from being classified as workers. The Washington state legislature passed similar legislation last year, and Seattle has had a minimum wage law for gig suppliers since 2020. Earlier this year, the Minnesota legislature passed a bill guaranteeing a minimum wage for gig drivers, but Uber and Lyft threatened to give it all up or part of the state responded, and the state’s Gov. Tim Walz vetoed it the legislation.
In New York, the $18 hourly wage was already a compromise after scrapping a previous plan to pay delivery workers $23 an hour. Terri Gerstein, a labor rights attorney at Harvard Law School’s Labor Center, said she expects the gig companies to face an uphill battle in court.
“The city has implemented this wage standard very seriously and carefully,” she said. “Uber and other companies have to prove that the city was ‘random and capricious’; Based on the balance sheet, it will be very difficult for them to do that.”