In a major victory for gig economy workers, New York City has increased the minimum wage for food delivery workers by around 180%.
On Sunday, New York City Mayor Eric Adams and the city’s Department of Consumer and Worker Protection (DCWP) announced a new minimum wage of $17.96 per hour for food delivery workers, effective from July 12th.
The pay rate will gradually increase to $19.96 by April 1st, 2025, offering a near-tripled base pay for over 60,000 delivery workers in the city with annual inflation-adjusted raises.
“Today is a historic win for New York City’s delivery workers, who have done so much for all of us through rain, snow, and throughout the pandemic,” said DCWP Commissioner Vilda Vera Mayuga, adding:
“When the rate takes full effect, workers will make three times as much as they do now. I am proud that our city has fulfilled its promise to provide more stability and protections for 60,000 workers and get them a dignified pay rate.”
Likewise, Kazi Fouzia, director of organizing for Desis Rising Up & Moving (DRUM), stated that “we welcome this wage increase that many of our members organized for, so that this city begins to properly value the delivery workers’ labor, their experiences, and risks.”
However, Fouzia expressed concern regarding any exploitation of loopholes that the new policy may have, particularly by app-based delivery services.
Here’s How the Pay Increase for Food Delivery Workers Would Work
According to the DCWP, the new policy mandates that apps can either pay minimum wages per trip, per hour, or design their formula, provided the result amounts to a minimum wage of $17.96 per hour on average (up to $19.96 by April 2025).
The pay will be approximately 50 cents per minute of trip time for apps that only pay by active trip minutes or 30 cents per minute before tips for hourly workers by 2023.
The new minimum wage is the result of years of organized efforts by groups such as Los Deliveristas Unidos and the Worker’s Justice Project to increase pay in the delivery sector as delivery workers cite poor and potentially hazardous working conditions, such as having to work during hurricanes or facing potential attacks.
It is worth noting that New York City has a history of ensuring fair wages for gig workers, with a similar pay bump being introduced for rideshare drivers in 2019.
DoorDash to Challenge the Decision, Likely by Litigation
Meanwhile, the new policy has sparked a backlash from delivery companies, with some claiming that they would consider legal action.
Eli Scheinholtz, Public Affairs Manager at online food delivery company DoorDash, stated that the new policy would mean $33.27 per hour for platforms selecting the trip time pay option, he said in a comment to The Verge.
“The ultimate outcome of this final rule could result in a $33-per-hour rate while on delivery — a pay rate that far exceeds the standards that apply to nearly every other industry in New York City,” Scheinholtz said, adding:
“Given the broken process that resulted in such an extreme final minimum pay rule, we will continue to explore all paths forward — including litigation — to ensure we continue to best support Dashers and protect the flexibility that so many delivery workers like them depend on.”
With a 65% market share, DoorDash is the largest food delivery company in the United States, according to data by Statista. Uber Eats, Grubhub, and Postmates are next in line, each with a market share of 23%, 9%, and 2%, respectively.
A report by Statista also expects DoorDash to increase its sales by more than 117% from 2020 to 2025.
