Multiple food-delivery services filed a lawsuit against New York City on July 5 seeking to block a new law establishing higher minimum wages for food-delivery workers, including app-based delivery workers.
DoorDash and Grubhub filed a joint lawsuit against the city in the Supreme Court of the State of New York, while Uber, the parent company of Uber Eats, filed its lawsuit separately, as did New York-based Relay Delivery.
In their joint lawsuit (pdf), food delivery platforms DoorDash and Grubhub called the new law “unlawful, arbitrary, and capricious,” and claimed it was based on “inherently biased and unreliable survey data” that would hurt delivery drivers instead of helping them.
In a statement, DoorDash claimed the law is “bad policy,” but stressed it has previously advocated for minimum pay standards in states across the country.
The company instead took aim at the “dubious methodology” behind the pay rise.
“Rather than identifying a comprehensive group of delivery workers to inform its findings, DCWP simply drew from the most convenient sample,” the company said. DCWP refers to the Department of Consumer and Worker Protection.
“Rather than presenting its questionnaire thoughtfully and without bias, DCWP used leading questions to push workers to respond in ways the agency wanted. And rather than rigorously analyzing the data, DCWP chose to selectively use the information that it had collected to confirm what it wanted to find,” it added.
“We cannot allow these kinds of policies to take effect without doing everything that we can to stand up for customers, local businesses, and the very workers this rule was intended to support,” DoorDash said.
Uber and Relay Delivery meanwhile, argued that the minimum wage raise would leave the companies out of business unless they in turn raised the fees they charge restaurants.
“The city’s entire rule depends on the false assumption that restaurants make no money on deliveries—it must be paused before damaging restaurants, consumers, and the couriers it purports to protect,” Uber spokesperson Josh Gold said in a statement.
New York Minimum Wage Law Explained
All of the delivery services are seeking a temporary restraining order and preliminary injunction preventing the minimum wage rule from being implemented while the litigation plays out.
New York City mayor Eric Adams signed the minimum wage standards for delivery drivers into law last month.
Under the new standards, delivery apps that only pay for trip time (the time from accepting a delivery offer to dropping off the delivery) must pay drivers roughly $0.50 per minute of every trip time in 2023, not including tips.
Apps that pay workers for all the time a worker is connected to the app (the time waiting for trip offers and trip time) must pay at least $17.96 per hour in 2023, which is approximately $0.30 per minute, not including tips, beginning July 12.
This will then increase to $19.96 beginning in April 2025.
The companies can decide whether they want to pay delivery workers per trip, per hour worked, or via another policy created by the company, but they must meet the minimum pay rate.
Pay will also be adjusted annually for inflation, according to the city.
Food-delivery workers in New York City currently make $7.09 per hour, on average, and there are over 60,000 such workers in the city, Mayor Adams said.
When he signed the new standards, Mayor Adams said the new pay rates 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.”
Lawsuits Are ‘No Surprise’
However, the delivery services, which pay drivers a base pay for each trip plus a tip —a varying amount selected by the customer—argue that they do not employ their drivers, who are considered independent contractors, meaning the regular minimum wage laws should not apply to them.
In addition, the delivery companies fear that compensating workers for time spent connected to the app could lead to multiple apps paying a driver for the same hours, as delivery drivers are generally active on multiple apps at the same time.
City Comptroller Brad Lander, one the primary sponsors of the wage bill, slammed the companies and their lawsuits in a statement Thursday.
“No surprise that Grubhub, DoorDash, and Uber are out to extract every penny they can from the delivery workers whose labor they rely on: that’s the gig business model. They also do not receive benefits for a job that involves navigating New York City traffic —often in inclement weather—climbing apartment stairs and dealing with hangry customers, among other hazards,” Mr. Lander told New York Daily News.
In September 2021, DoorDash, GrubHub, and Portier sued New York City for capping how much they can charge restaurants.
“Gig companies have sued New York City repeatedly: to block accessibility requirements for people with disabilities, to reduce cruising time, and to prevent the minimum pay requirement for for-hire drivers that became law in 2019. But New York City’s for-hire driver minimum pay law benefits drivers without harming ridership, and the delivery-worker minimum pay law will work just as well,” Mr. Lander said.
In a separate statement to The Wall Street Journal, the DCWP, which drafted the law, said, “Delivery workers, like all workers, deserve fair pay for their labor, and we are disappointed that Uber, DoorDash, GrubHub, and Relay disagree.”
“These workers brave thunderstorms, extreme heat events, and risk their lives to deliver for New Yorkers—and we remain committed to delivering for them,” the department continued. “The minimum pay rate will help uplift thousands of working New Yorkers and their families out of poverty.”
The Epoch Times has contacted Grubhub and Relay Delivery for further comment.
