Uber, DoorDash and Grubhub must pay their food delivery workers at least $17.96 an hour after losing their second attempt to block New York City’s minimum wage law targeting the app-based firms.
The ruling by a state appeals court Thursday forces the ubiquitous delivery services to either pay couriers the flat hourly rate of $17.96, plus tips, or pay per delivery at about 50 cents a minute.
The appeals court rejected efforts by the companies to overturn a September decision by New York Acting Supreme Court Justice Nicholas Moyne to allow the law to go into effect, mandating that Uber, DoorDash and Grubhub pay their gig workers the increased hourly rate, which will rise to nearly $20 in April 2025.
Mayor Eric Adams said the ruling was a “win for working New Yorkers,” calling the decision “a powerful tool to hold apps accountable.”
“Our delivery workers have consistently delivered for us — now, we are delivering for them,” Adams added.
The apps’ delivery workers in the city earned about $11 an hour on average after expenses, far below the city’s $15 minimum wage.
Because app-based delivery workers are usually treated as independent contractors rather than company employees, general minimum wage laws have not applied to them.
An Uber spokesperson told The Post that decision “eliminates jobs, discourages tipping and forces couriers to go faster and accept more trips.”
A DoorDash spokesperson said: “The sad truth is that the court has chosen to ignore the harmful consequences such a misguided minimum pay rule will cause, and failed to justify its decision to allow the city to pick winners and losers in how it is applied.”
A Grubhub spokesperson also weighed in: “We’re disappointed with the judge’s decision and are evaluating our next steps.”
Uber, DoorDash and Grubhub first attempted to strike down the law — the first of its kind in the US — when the companies filed complaints in New York state back in July, arguing that the mandate represents a misunderstanding of how the food delivery industry works.
The companies, along with food delivery service Relay Delivery, have claimed the law will force them to shrink service areas to absorb the new labor costs, ultimately harming customers and restaurants.
Moyne had delayed the law from being implemented on July 12 while he considered the companies’ request to block it until the case is resolved, but ultimately decided in September to move forward with the law-setting minimum wage — a move the companies joined forces to fight again.
Uber, meanwhile, had to dish out $290 million earlier this month to settle accusations from New York’s attorney general that its ride-sharing business has been “stealing earnings” from thousands of Big Apple drivers for years.
The massive sum accounts for back pay, paid sick leave, proper hiring and earnings notices and other improvements to drivers’ working conditions.
Lyft was ordered to pay $38 million as part of the settlement.
New York Attorney General Letitia James said more than 100,000 drivers throughout New York are entitled to receive settlement funds — implying an average payout of $3,280.
Newer drivers who began after 2017 are not eligible for any additional payments, though James assured that along with the settlement, Uber and Lyft have agreed to provide “new benefits for leave, payment, training and job support.”
These improved benefits — which include up to one week of paid sick leave per year — are set to take effect no later than Feb. 29, 2024.
Eligible drivers can file a claim to receive additional funds they are owed, James said.
All the while, the ride-sharing rivals were threatening to halt operations in Minneapolis if the mayor implemented increased minimum wages with a law similar to the one passed in New York.
A new rule proposed in Minneapolis in August sought to amend its regulations for ride-sharing employees, including establishing a minimum wage that says drivers should be paid at least $1.40 per miles and $0.51 per minute.
Minneapolis Mayor Jacob Frey, however, vetoed the mandates, which would have otherwise gone into effect on Jan. 1, 2024.