The three major food delivery app companies, Uber, DoorDash, and Grubhub, have taken legal action to block a new rule proposed by New York City that would require them to pay their delivery workers nearly $18 an hour.
The companies filed motions in the New York Supreme Court seeking temporary restraining orders against the measure, which is set to be implemented on July 12. Currently, these app companies pay drivers per delivery rather than per hour, although the New York City Department of Consumer and Worker Protection estimates that this results in an average hourly pay of $7.09 before tips. The department announced the new minimum wage rule last month, aiming to raise pay for delivery workers to nearly $20 an hour by 2025.
In their joint lawsuit, DoorDash and Grubhub argue that the rule is based on “inherently biased and unreliable survey data” and claim that it would ultimately harm delivery drivers instead of benefiting them. The companies state that if the rule is implemented, the increased costs would be passed on to consumers, leading to a decrease in customers for delivery workers and potentially damaging the companies’ reputation within the industry.
Uber, in a separate lawsuit, expressed concern that the increased minimum wage would negatively impact local restaurants, as higher costs may discourage customers from placing orders.
Delivery app companies have long resisted regulatory measures targeting their operations. In the current lawsuit, DoorDash and Grubhub assert that the rule is based on flawed data from a delivery worker survey with questionable methodology. The companies argue that the survey influenced respondents’ answers by suggesting “correct” responses and that it was explicitly designed to increase delivery workers’ pay.
In response to the lawsuits, Ligia Guallpa, executive director of the Worker’s Justice Project, a labor advocacy group involved in organizing the survey, described the legal actions as “unconscionable” and highlighted the struggles faced by workers in a city grappling with an affordability crisis.
While Grubhub has engaged in discussions with the city regarding support for its drivers, including exploring alternative pay methods, concerns have been raised by app companies about the requirement to monitor the time spent by riders on the app without accounting for time spent on rides themselves.
At the time of reporting, Uber and the New York City Department of Consumer and Worker Protection had not provided comments on the legal actions taken by the companies.