New York City sets an $18 per hour minimum wage for food delivery workers
App companies will need to pay their workers nearly $20 per hour by 2025.
New York is about to become the first city in the United States to mandate a minimum wage for food delivery workers. Starting next month, delivery apps, including Uber Eats and GrubHub, will be required to pay their workers $17.96 per hour, plus tips, by July 12th. Then, by 2025, the city will mandate Uber, GrubHub and other players in the space pay delivery workers $19.96 per hour, with adjustments for inflation to follow thereafter.
The minimum wage in New York City is $15 per hour. By setting the hourly pay for delivery workers above that, the city’s Department of Consumer and Worker Protection (DCWP) agency notes it’s accounting for the fact Uber, GrubHub and DoorDash classify their delivery workers as contractors, who tend to pay higher taxes and often need to pay work-related expenses out of their own pocket. According to an estimate from the DCWP, there are more than 60,000 food delivery workers in New York, earning an average of $7.09 per hour.
The final hourly rate the city announced on Monday is less than the $23.82 figure the agency had called for in 2022 (PDF link). In March, the DCWP revised its estimate to account for “multi-apping,” a practice wherein some workers will deliver for more than one app at the same time. App companies, including Uber and GrubHub, pushed back against the regulation, and now that it’s set to finally go into effect, they’re still not happy about it. "The city is lying to delivery workers – they want apps to fund the $30 per hour wage by eliminating jobs and reducing tipping while forcing the remaining workers to deliver orders faster," Uber spokesperson Josh Gold told Engadget.
“While we believe New York City had good intentions, we are disappointed in the DCWP’s final rule, which will have serious adverse consequences for delivery workers in New York City,” a GrubHub spokesperson said. “Unfortunately, New York City chose not to partner with the industry on a solution that would have benefited all aspects of the gig economy.”
How delivery apps pay their workers is up to them, so long as they meet the minimum set by the city. Companies that pay only for trip time must pay approximately 50 cents per minute, while firms that compensate workers for the entire time they’re logged in, including any downtime waiting for an order, must pay approximately 30 minutes per minute, not including tips. The law comes after New York began enforcing a minimum wage for Uber and Lyft drivers in 2022.
