New York City is poised to become a trailblazer in the United States by introducing a mandatory minimum wage for food delivery workers. Effective from next month, popular delivery apps such as Uber Eats and GrubHub will be obligated to pay their workers a minimum of $17.96 per hour, in addition to tips, starting from July 12th. By 2025, the city plans to raise the minimum wage for delivery workers to $19.96 per hour, with subsequent adjustments to account for inflation.
The existing minimum wage in New York City stands at $15 per hour. By setting a higher hourly pay for delivery workers, the Department of Consumer and Worker Protection (DCWP) of the city acknowledges the unique circumstances of app-based platforms like Uber, GrubHub, and DoorDash. These companies classify their delivery workers as independent contractors, who face increased tax burdens and often have to cover work-related expenses themselves. According to the DCWP’s estimate, there are over 60,000 food delivery workers in New York, earning an average of $7.09 per hour.
The recently announced hourly rate falls short of the $23.82 figure initially proposed by the agency for 2022 (PDF link). In March, the DCWP revised its estimation to account for “multi-apping,” a practice where workers simultaneously deliver for multiple apps. The regulation faced opposition from app companies, including Uber and GrubHub, who expressed their dissatisfaction. Even now, as it is set to be implemented, they remain discontented. “The city is deceiving delivery workers – they aim to fund the $30 per hour wage by eliminating jobs and reducing tipping, all while pressuring the remaining workers to expedite deliveries,” stated Uber spokesperson Josh Gold to BuyTechBlog.
“While we acknowledge New York City’s good intentions, we are disappointed with the final rule from the DCWP, as it will have severe negative consequences for delivery workers in the city,” commented a spokesperson from GrubHub. “Regrettably, New York City declined to collaborate with the industry to find a solution that would have benefited all aspects of the gig economy.”
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While companies have the flexibility to determine how they compensate their workers, they must adhere to the minimum wage established by the city. Companies that pay solely for the duration of trips must compensate their workers approximately 50 cents per minute. On the other hand, companies that provide payment for the entire time workers are logged into the app, including periods of inactivity while waiting for orders, must pay approximately 30 minutes per minute, excluding tips. This legislation follows New York’s implementation of a minimum wage for Uber and Lyft drivers in 2022.
Frequently Asked Questions (FAQs) about minimum wage for food delivery workers
Q: What is the new minimum wage for food delivery workers in New York City?
A: The new minimum wage for food delivery workers in New York City is set at $17.96 per hour, plus tips, starting from July 12th. By 2025, the minimum wage will increase to $19.96 per hour, with adjustments for inflation.
Q: Why did New York City implement a minimum wage specifically for delivery workers?
A: New York City recognized that delivery workers employed by apps like Uber Eats and GrubHub are often classified as independent contractors, facing higher taxes and work-related expenses. By setting a minimum wage above the city’s general minimum wage, the Department of Consumer and Worker Protection aims to address these unique circumstances and provide fair compensation for delivery workers.
Q: How many food delivery workers are estimated to be in New York City?
A: According to estimates from the Department of Consumer and Worker Protection, there are over 60,000 food delivery workers in New York City.
Q: How do delivery apps pay their workers under the new regulation?
A: The regulation allows flexibility for delivery app companies to determine how they compensate their workers. However, they must ensure that the workers receive at least the minimum wage set by the city. Companies that pay only for trip time must compensate workers approximately 50 cents per minute, while those that compensate for the entire time workers are logged in, including downtime, must pay approximately 30 minutes per minute, excluding tips.
Q: How did delivery app companies react to the new regulation?
A: Delivery app companies, such as Uber and GrubHub, expressed disappointment with the final rule and raised concerns about potential adverse consequences for delivery workers. They argued that the city’s approach may lead to job cuts, reduced tipping, and increased pressure on the remaining workers to deliver orders faster.
Q: Has New York City implemented a minimum wage for other gig economy workers?
A: Yes, New York City previously enforced a minimum wage for Uber and Lyft drivers in 2022. The introduction of a minimum wage for food delivery workers is an extension of the city’s efforts to ensure fair compensation and worker protection within the gig economy.
More about minimum wage for food delivery workers
- New York City Department of Consumer and Worker Protection
- Uber Eats
- GrubHub
- DoorDash
- BuyTechBlog
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