Dive Brief:
- New York State Judge Nicholas Moyne denied an injunction sought by Uber Eats, DoorDash and Grubhub against New York City’s $17.96 per hour app-based delivery driver minimum wage on Thursday, court records show.
- The companies’ lawsuit against the wage rule will continue, but the denial of the injunction mean the three delivery aggregators will have to pay New York City workers the full wage starting with their next pay periods, barring further legal challenges, the New York City Department of Consumer and Worker Protection confirmed in an email to Restaurant Dive.
- DoorDash confirmed it would have to start paying the wage rate on Monday and said it was “evaluating our legal options moving forward.” The wage is scheduled to increase until it reaches $19.96 in 2025.
Dive Insight:
Uber Eats and DoorDash implicitly threatened to raise prices and cut their number of delivery workers, citing the city’s study on the wage, which suggested those were some of the means by which the delivery aggregators could compensate for new costs.
The “pay rate will reduce opportunity and increase costs for all New Yorkers,” a DoorDash spokesperson said.
Josh Gold, an Uber spokesperson, said the change would “put thousands of New Yorkers out of work and force the remaining couriers to compete against each other to deliver orders faster.”
Uber is also subject to a pay rate established by New York City’s Taxi and Limousine commission, which served as the initial basis for the calculation of the delivery pay rate, before New York cut the final target wage by nearly $4 an hour as a result of industry opposition. In its most recent 10-Q, Uber said the taxi rate has “had an adverse impact on our financial performance.”
In their injunction, which Moyne initially allowed to stop the wage increase in July, the delivery companies argued that the city’s efforts were arbitrary, irrational, included too much on-call time, require too much recordkeeping, assumed restaurants did not benefit from delivery and were based on flawed data that prevented the city from seeing the full cost of the wage.
However, in his denial of the companies’ injunction, Moyne wrote that the city had “subpoenaed data from the platforms that would have enabled it to model incidence of higher pay on detailed subsets of merchants and consumers, the platforms failed to produce it.”
Moyne wrote that some of the companies’ accusations around methodology and the impact of worker surveys on the calculation of the rate were “unsubstantiated.” The Judge also found that the companies concerns about on-call time had already been addressed by the rule.
“It was in direct response to the petitioners’ concerns and comments that the DCWP created the Alternative Method and the adjustment for ‘multi-apping,’” Moyne wrote.
Moyne did grant a fourth delivery service, Relay, its injunction, because Relay uses an exclusively business-to-business delivery model and “has no consumer-facing business and deals only with its restaurant customers to deliver the orders they receive.”
“Uber, GrubHub and DoorDash have also failed to show irreparable injury or a balance of equities in their favor,” Moyne found. “[They] can charge a delivery fee to the end consumer. Therefore, their injury is far more speculative than that of Relay.”
DCWP Commissioner Vilda Vera Mayuga celebrated the ruling.
“We are glad the court made this decision, and we are grateful for the tireless advocacy of so many delivery workers who fought hard to make today a reality. Delivery workers, like all workers, deserve fair pay for their labor,” Mayuga said in a press release.
