Doordash, Grubhub and Uber sue New York City over minimum wage law

Jul 7, 2023, 8:14 AM

A DoorDash delivery bike is seen in Manhattan. Food delivery platforms DoorDash, Grubhub and Uber E...

A DoorDash delivery bike is seen in Manhattan. Food delivery platforms DoorDash, Grubhub and Uber Eats are challenging in court New York City’s new minimum wage law for app food delivery workers. (STRF/Star Max/IPx/AP via CNN)

(STRF/Star Max/IPx/AP via CNN)

(CNN) — Food delivery platforms DoorDash, Grubhub and Uber Eats are challenging in court New York City’s new minimum wage law for app food delivery workers.

All three companies sued the city, maintaining that the law would hurt delivery workers more than help them. DoorDash and Grubhub filed a suit jointly to the Supreme Court of the State of New York, while Uber — the parent company of Uber Eats — filed its lawsuit separately.

In a statement to CNN, DoorDash called the law “bad policy,” though it said it was not opposed to a minimum wage for delivery workers.

“We will not stand by and let the harmful impacts of this earnings standard on New York City customers, merchants, and the delivery workers it was intended to support go unchecked. We – and others – clearly and repeatedly warned the city that using such a flawed process to underpin its rulemaking would have lasting and harmful impacts for all New Yorkers who use these platforms,” DoorDash said.

The law, which was announced last month, would increase pay for app delivery workers to $17.96 per hour before tips on July 12, and raise pay again to nearly $20 per hour in April 2025. Pay would be adjusted annually for inflation.

Vilda Vera Mayuga, commissioner of New York’s Department of Consumer and Worker Protection, said the city’s law is designed to support delivery workers.

“Delivery workers, like all workers, deserve fair pay for their labor, and we are disappointed that Uber, DoorDash, GrubHub, and Relay disagree,” she said in a statement. “The minimum pay rate will help uplift thousands of working New Yorkers and their families out of poverty. We look forward to the court’s decision and to apps beginning to pay these workers a dignified rate.”

The DoorDash and Grubhub lawsuit alleges that the new regulation is legally flawed because it targets only meal-delivery services and not grocery-delivery services. It also argues the regulation is legally flawed because it would compel the companies to pay workers for hours that they are available to take orders while logged into the delivery apps, even if they don’t actually make any deliveries.

The DoorDash and Grubhub lawsuit claims the New York City Department of Consumer and Worker Protection’s analysis of the regulation would add an average of $5.18 per order.

The city’s new law comes after online meal delivery services spiked in popularity during the pandemic; delivery orders remain higher than pre-COVID levels.

According to a news release from New York City, food delivery workers currently make $7.09 per hour, on average. There are more than 60,000 food delivery workers working in the city, according to the local government.

In a statement announcing the law, New York City Mayor Eric Adams said the rule would “guarantee these workers and their families can earn a living, access greater economic stability, and help keep our city’s legendary restaurant industry thriving.”

“Our delivery workers have consistently delivered for us — now, we are delivering for them,” he said.

However, major food delivery apps have been united in their opposition to the law.

Josh Gold, Uber’s senior director for public affairs, said the law “must be paused before damaging restaurants, consumers and the couriers it purports to protect.”

A Grubhub spokesperson said that the company “commends the City’s attention to this issue, but we cannot support a solution that has such unintended implications for those who rely on food delivery.”

The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

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Doordash, Grubhub and Uber sue New York City over minimum wage law