A law setting minimum wages for delivery-app drivers in New York City has spurred a lawsuit from DoorDash, GrubHub and Uber Eats. The law, which is set to go into effect July 12, requires that drivers be paid either a minimum of $17.96 per hour when active on an app or 50 cents for every minute they spend on a trip, not including tips. The companies say the law will force them to raise customer fees and cap their worker numbers to offset costs incurred by higher wages.
- DoorDash recently said it would change its wage structure, allowing workers to choose whether they’re paid per hour or per delivery and switch between the two.
By Todd Dybas, Editor at LinkedIn News
BY MAX HE
BY KAREN DANIELS
DoorDash, Uber eats, and Grubhub has jointly filed #lawsuits against New York City, challenging two regulations that impact the food delivery industry. The first regulation is a new law that enforces #minimumwages for food-delivery workers. In contrast, the second regulation imposes a permanent cap on the commissions these apps can charge restaurants.
The minimum-wage law, which goes into effect on July 12, mandates that the companies pay their workers either approximately 50 cents per minute on a trip or a minimum of $17.96 per hour for their active time on the app, excluding tips; the latter works out to around 30 cents a minute. The companies argue that these #payrates could exceed the minimum wages in other industries. They also raise concerns about compensating workers for online time, given the nature of their work across multiple apps and the potential for overlapping hours.
Apart from the minimum-wage law, the food delivery apps are also contesting a permanent #feecap on commissions charged to restaurants. This cap restricts the amount these apps can charge restaurants for their services. The companies argue that the fee cap is detrimental, interfering with negotiated contracts and potentially leading to renegotiations, reduced marketing efforts, and increased consumer fees.
These lawsuits underscore the ongoing clash between the food delivery apps and the city regarding industry regulations. The companies claim that the regulations impede their operations and ability to offer #flexibleopportunities for gig workers. Conversely, proponents of the rules argue that they seek to bring fairness to the industry and support struggling businesses.
The outcomes of these legal battles will have significant implications for the food delivery industry and the relationship between these apps and local regulators in New York City and potentially beyond.