Judge Affirms Pay Raise For Food Delivery Workers in New York

A judge on Thursday said New York City regulators could move forward and raise minimum pay standards for app-based food delivery workers, a move meant to force tech companies to better compensate people for gig jobs.

The new pay standard was supposed to go into effect in July, nearly two years after the City Council passed a set of bills meant to improve working conditions for the couriers, and would require gig platforms to pay them about $18 per hour and to increase that amount to $20 per hour by 2025. Delivery workers currently make about $11 an hour on average, according the city’s estimate.

But shortly before the wage increases were set to go into effect, three food delivery giants, Uber, DoorDash and Grubhub, filed requests for temporary restraining orders in State Supreme Court in Manhattan to block them. Relay, a smaller, New York-based food delivery platform, did the same. The judge, Nicholas Moyne, paused the change while he deliberated.

On Thursday, he ruled against the three larger delivery companies and allowed the wage increase to go through, but said that Relay, which has a different business model, should be granted a preliminary injunction allowing it to continue to challenge the increase.

“The petitioners have not demonstrated a likelihood of success on the merits” of their case, Justice Moyne wrote in his decision. It is possible that the three larger companies will appeal his ruling.

The tech platforms argued that they would be forced to pass on the cost of the higher wages to consumers by raising prices. They said that the city’s modeling did not correctly calculate the degree to which higher prices would harm local restaurants. And they said that the new system would work to deliverers’ disadvantage because the companies, to control costs, would have to strictly monitor how much time workers spent on the apps but not actually making deliveries.

“The city continues to lie to workers and the public,” Josh Gold, an Uber spokesman, said in a statement. “This law will put thousands of New Yorkers out of work and force the remaining couriers to compete against each other to deliver orders faster.”

The New York City Department of Consumer and Worker Protection, the agency behind the new wage law, did not immediately respond to a request for comment.

Delivery workers opposing the lawsuit had gathered at an Aug. 3 hearing in Lower Manhattan, where Justice Moyne spent hours watching PowerPoint presentations delivered by lawyers representing the gig companies as they explained the finer points of driver utilization rates and how the opposing sides each categorized full-time and part-time work.

“Right now, they are earning poverty wages courtesy of these multibillion dollar apps,” Karen Selvin, a lawyer representing the city, told the judge.

The decision in New York was a contrast to a string of recent victories for the gig companies, which earlier this year successfully petitioned Gov. Tim Walz of Minnesota and Jacob Frey, the mayor of Minneapolis, to block bills that would have guaranteed a minimum wage for Uber and Lyft drivers, arguing that the pay increases for drivers would have made operating rideshare services too expensive.

For years, gig companies and labor activists have fought over the compensation and treatment of workers. Gig workers are independent contractors, meaning they are responsible for their own expenses and do not earn a minimum wage or health care benefits like employees do. Uber and other gig companies argue that workers value the flexibility of setting their own hours and being independent, while labor groups contend that they are being exploited and deserve better protections.

Some states have already enacted minimum pay standards. In California, gig companies backed a ballot measure called Proposition 22 that passed in 2020, which offered gig workers a minimum wage and other limited benefits in exchange for precluding them from being classified as employees. (It is currently facing a legal challenge.) The Washington State Legislature passed a similar law last year, and Seattle has had a minimum wage law for gig deliverers since 2020.

The proposal in New York was already a compromise, after the city scaled back an earlier plan to pay delivery workers $23 per hour. The gig companies faced a tough challenge in proving that the city was “arbitrary and capricious” in enacting its pay standard, and they ultimately failed.