Judge Affirms Pay Raise For Food Delivery Workers in New York

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A judge on Thursday said New York City regulators could move forward and raise minimum wages for app-based food delivery workers, ruling against three delivery giants that had challenged the rule.

The new minimum pay law, aimed at forcing tech companies to better compensate gig workers, would require the platforms to pay the workers about $18 per hour at first and to increase that amount to $20 per hour by 2025. Delivery workers currently make about $11 an hour on average, according the city’s estimate.

The increase was supposed to begin in July, nearly two years after the City Council passed a landmark set of bills meant to improve working conditions for the couriers.

But days before the wage increases were set to go into effect, the three companies, Uber, DoorDash and Grubhub, filed requests for temporary restraining orders in State Supreme Court in Manhattan to block them. Relay, a smaller, New York-based food delivery platform, did the same. The judge, Nicholas Moyne, paused the change while he deliberated.

On Thursday, he ruled against the three larger delivery companies and allowed the wage increase to go through, but said that Relay, which has a different business model, should be granted a preliminary injunction allowing it to continue to challenge the increase.

“The petitioners have not demonstrated a likelihood of success on the merits” of their case, Justice Moyne wrote in his decision. It is possible that the three larger companies will appeal his ruling.

The tech platforms argued that they would be forced to pass on the cost of the higher wages to consumers by raising prices. They said that the city’s modeling did not correctly calculate the degree to which higher prices would harm local restaurants. And they said that the new system would work to deliverers’ disadvantage because the companies, to control costs, would have to strictly monitor how much time workers spent being on the apps but not actually making deliveries.

In his decision, Justice Moyne rejected these arguments, and said workers could still have flexible arrangements while earning a minimum wage.

“Higher compensation, including for on-call time, need not be mutually exclusive with worker flexibility, and it is not irrational to pursue both goals simultaneously,” he wrote.

But he said the New York City Department of Consumer and Worker Protection, the agency behind the new wage law, had not properly considered the differences in Relay’s business model when setting its minimum pay standard. Relay does not take orders from customers like Uber and DoorDash do, but instead contracts directly with restaurants that receive orders and sends couriers to them.

The New York agency “does not adequately explain why a third-party courier service such as Relay should have the same minimum pay rate as the less efficient third-party delivery services,” Justice Moyne wrote.

The worker protection agency did not immediately respond to a request for comment.

Uber criticized the decision and said the city had used a flawed rationale to calculate what the minimum pay should be.

“The city continues to lie to workers and the public,” Josh Gold, an Uber spokesman, said in a statement. “This law will put thousands of New Yorkers out of work and force the remaining couriers to compete against each other to deliver orders faster.”

The Worker’s Justice Project, a labor advocacy group that pushed for the new pay law, celebrated the judge’s ruling.

“Despite their desperate attempts to sow division and pit workers against each other, Uber, DoorDash and Grubhub continue to lose over and over again in their fight against a living wage for New York City’s 65,000 delivery workers,” Ligia Guallpa, the group’s executive director, said in a statement.

Delivery workers opposing the lawsuit had gathered at an Aug. 3 hearing in Lower Manhattan, where Justice Moyne spent hours watching PowerPoint presentations delivered by lawyers representing the gig companies as they explained the finer points of driver utilization rates — which measure how busy workers are when they are logged into the apps — and how the opposing sides each categorized full-time and part-time work.

“Right now, they are earning poverty wages courtesy of these multibillion dollar apps,” Karen Selvin, a lawyer representing the city, told the judge.

The decision in New York contrasted with a string of recent victories for the gig companies, which earlier this year successfully petitioned Gov. Tim Walz of Minnesota and Jacob Frey, the mayor of Minneapolis, to block bills that would have guaranteed a minimum wage for Uber and Lyft drivers, arguing that the pay increases for drivers would have made operating ride-share services too expensive.

But Terri Gerstein, a workers’ rights lawyer at Harvard Law School’s labor center, pointed to past wins for labor advocates on minimum wage cases, including in New York City and Seattle, as signs that Uber’s success on such issues was not inevitable.

“Even though the gig companies have tremendous political power, and tremendous amounts of money when they bring cases to court, they don’t always win,” she said. “There is room for progressive cities to take action to make sure these workers are at least getting a minimum wage.”

For years, gig companies and labor activists have fought over the compensation and treatment of workers. Gig workers are independent contractors, meaning they are responsible for their own expenses and do not earn a minimum wage or health care benefits like employees do. Uber and other gig companies argue that workers value the flexibility of setting their own hours and being independent, while labor groups contend that they are being exploited and deserve better protections.

Some states have already enacted minimum pay standards. In California, gig companies backed a ballot measure called Proposition 22 that passed in 2020, which offered gig workers a minimum wage and other limited benefits in exchange for precluding them from being classified as employees. (It is currently facing a legal challenge.) The Washington State Legislature passed a similar law last year, and Seattle has had a minimum wage law for gig deliverers since 2020.

The proposal in New York was already a compromise, after the city scaled back an earlier plan to pay delivery workers $23 per hour. The gig companies faced a tough challenge in proving that the city was “arbitrary and capricious” in enacting its pay standard, and they ultimately failed.

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