Uber, DoorDash and Grubhub won’t be able to get out of paying minimum wage to their New York City delivery workers after all, following a judge’s decision to reject their bid to skirt the city’s new law. The upcoming law, which is still pending due to the companies’ ongoing lawsuit, aims to secure better wage protections for app-based workers. Once the suit settles, third-party delivery providers will have to pay delivery workers a minimum wage of roughly $18 per hour before tips, and keep up with the yearly increases, reports.
The amount, which will increase April 1 of every year, is slightly higher than the city’s standard minimum wage, taking into account the additional expenses gig workers face. At the moment, food delivery workers make an estimated $7-$11 per hour on average.
New York Acting Supreme Court Justice Nicholas Moyne , when the three companies and the smaller delivery service, Relay Delivery, sued the city, arguing that the raised rates will have a negative impact on their services. With Moyne’s latest decision, it’ll now move forward. While Uber, DoorDash and Grubhub will have to comply once it takes effect, Relay will be given more time to renegotiate its contracts with restaurants, according to Reuters.
The move makes NYC the first US city to require a minimum wage for app-based deliveries, and others are likely to follow suit. The to raise their minimum rates for drivers, forcing Uber and Lyft to raise their per-mile rates by just over 5 percent in 2022.