A New York state judge has temporarily paused a law that would have raised the minimum wage to nearly $18 an hour for food delivery workers in New York City.
The ruling is in favor of four delivery food services—DoorDash, Grubhub, Uber, and New York-based Relay Delivery—which filed lawsuits to temporarily block the law.
New York State Supreme Court Judge Nicholas Moyne said in the preliminary injunction (pdf) that the law is on hold until lawyers for the plaintiffs make additional filings.
He set a hearing for July 31 to hear arguments on whether the preliminary injunction should remain in place while the legal challenges play out.
DoorDash and Grubhub had filed a joint lawsuit, while Uber, the parent company of Uber Eats, filed its lawsuit separately, as did New York-based Relay Delivery. The lawsuits were filed against the city in the Supreme Court of the State of New York.
The minimum wage law, signed by New York City Mayor Eric Adams in June, would have gone into effect on July 12. Mr. Adams said the new requirement would provide support that delivery drivers deserve.
The city’s Department of Consumer and Worker Protection had set the requirement that food delivery workers in the city must receive at least $17.96 per hour in 2023. The requirement would then increase to a minimum of $18.96 per hour in April 2024, and then $19.96 per hour in April 2025.
The figures mark a big step up from the average $7.09 per hour that over 60,000 food delivery workers in New York City currently make.
Minimum wage laws don’t apply for app-based food delivery workers, who are generally regarded and treated as independent contractors, rather than company employees.
In their joint complaint (pdf), companies DoorDash and Grubhub called the new law “unlawful, arbitrary, and capricious,” and argued the minimum wage requirement was based on “inherently biased and unreliable survey data” that would hurt delivery drivers. The companies said that it would result in a more than $5 increase for customers per order.
Uber and Relay Delivery meanwhile, separately argued that the minimum wage raise would leave the companies out of business unless they raise the fees they charge restaurants.
The food delivery giants issued statements expressing they were pleased with the judge’s decision to halt the minimum wage law.
Grubhub said in its statement that the rule, if allowed to stand, “will have serious adverse consequences for delivery partners, consumers, and independent businesses.” DoorDash said it hoped that the decision “puts us on the path towards the city establishing a more reasonable earnings standard that reflects how these [food delivery] platforms are used by New Yorkers.” Meanwhile, an Uber spokesperson said the company wants to work with the city and others “to figure out a minimum pay rule that doesn’t have devastating consequences for couriers, consumers, and restaurants.”
Vilda Vera Mayuga, the commissioner of NYC’s Department of Consumer and Worker Protection, said in a statement she was “extremely disappointed” with the preliminary injunction.
“These apps currently pay workers far below the minimum wage, and this pay rate would help lift thousands of working New Yorkers and their families out of poverty,” she said in a statement. “We look forward to a quick decision so that the dignified pay rate that workers deserve to earn is not delayed any more than necessary.”
Katabella Roberts and The Associated Press contributed to this report.
