On Thursday, the well-known delivery apps Uber, DoorDash, and GrubHub were unsuccessful in their attempt to stop New York City’s requirement that app-based delivery employees be paid a minimum wage.
Companies sued the city in July, just before the rule was set to take effect, and acting state Supreme Court Justice Nicholas Moyne decided against them. The ruling will now pave the road for the minimum wage to be adopted for roughly 65,000 of the city’s delivery workers, with an eventual goal of $19.96 per hour.
“Multi-billion dollar companies are unable to profit off the backs of immigrant workers all while paying them pennies in New York City and get away with it,” said Ligia Guallpa, the director of the New York-based Workers Justice Project, which assisted in leading the advocacy efforts for a minimum wage. “The judge’s decision is yet another reminder that the underdog workers will prevail.”
The mandate, according to Uber spokesman Josh Gold, will hurt couriers.
“The city continues to lie to workers and the public,” Gold claimed in a statement. The surviving couriers will be forced to compete with one another to complete orders more quickly as a result of this law, which will force thousands of New Yorkers out of work.
A spokesman for Grubhub described the verdict as “disappointing,” adding that the business is “evaluating our next legal steps.”
The representative stated, “We will now be compelled to make changes to our platform that will have negative effects on delivery partners, customers, and independent companies. The City’s rule, while well-intentioned, is the consequence of a defective rulemaking process that failed to apply consistently to the food delivery business, we continue to be confident in our legal position and firmly believe.
An inquiry for comment from NBC News was not answered by DoorDash. However, the business referred to the city’s Department of Consumer and Worker Protection’s June decision to raise the minimum wage as “deeply misguided,” claiming that it would limit the prospects for its delivery staff, drive more consumers away from placing orders, and have an impact on jobs at nearby restaurants.
The choice “ignores the unintended consequences it could have and sadly will damage the very delivery workers it seeks to support,” a business representative stated at the time in a statement.
Relay, a smaller platform that had also sued the city but serves as a courier service for eateries, was given an injunction despite the fact that the three companies lost in Thursday’s decision.
In July, Moyne briefly postponed the mandate as he thought over the corporations’ plea. The three most popular apps have argued that the higher wage requirement will result in price increases for consumers while also affecting delivery workers’ earnings by forcing businesses to track the time they spend on the apps when not making deliveries.
With an average hourly wage of $7.09, several app-based delivery workers in the city currently rely entirely on tips to support themselves. Due to their status as independent contractors, app-based delivery personnel are now free from both minimum wage laws and labor rights.
According to the decree published in June, the minimum wage would begin at $17.96 an hour and rise to $19.96 by April 2025.
Guallpa told NBC News in June, following the mandate’s passage, “This is pretty much altering not only the course of history but… guaranteeing and expanding protections for gig workers.”