NYC sued by food delivery services over new minimum wage law

Uber, DoorDash, GrubHub seek to stop New York City's pay requirements for delivery workers

A group of food delivery companies is suing New York City to stop the Big Apple's new law requiring a $17.96-an-hour minimum wage for delivery workers starting next week.

Uber Technologies, DoorDash and New York City-based Relay Delivery all filed separate lawsuits against the city Thursday seeking a temporary restraining order to halt the pay rate requirement set to go into effect July 12. GrubHub also joined DoorDash's complaint.

GrubHub driver on bike in NYC

A delivery man bikes with a food bag from Grubhub April 21, 2021, in New York. Uber Eats, DoorDash and Grubhub sued New York City Thursday, July 6, 2023, to block its new minimum pay rules for food delivery workers.  (AP Photo/Mark Lennihan, File / AP Newsroom)

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App-based delivery service workers are typically gig workers who operate as independent contractors, so minimum wage laws generally do not apply to them. But New York City aims to change that with the law that is the first of its kind in the U.S., and officials say the move will lift thousands of residents out of poverty.

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Supporters of the law say delivery workers in the city earn an average of $11 an hour after expenses, far below the city's $15 minimum wage. If the new law requiring $17.96 for delivery workers moves forward, the rate will be raised to nearly $20 an hour in April 2025.

food delivery worker bikes in NYC

A food delivery worker bikes through Times Square in New York City Dec. 29, 2021. Four food delivery companies sued the city Thursday in an effort to stop its new minimum wage law for gig workers. (Tayfun Coskun/Anadolu Agency via Getty Images / Getty Images)

But delivery companies say the data gathered on delivery worker pay was flawed and argue the new law will add burdensome regulations, and the higher costs will force them to charge customers more. Relay Delivery says the law would put it out of business unless the company raises the fees it charges restaurants.

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"The city’s entire rule depends on the false assumption that restaurants make no money on deliveries. It must be paused before damaging restaurants, consumers and the couriers it purports to protect," Uber spokesperson Josh Gold said in a statement.

food delivery signs in restaurant window

Doordash, Grubhub and Uber Eats signs on a restaurant door in New York City. The companies are suing the city over its new law imposing a nearly $18-per-hour minimum wage for delivery workers. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images / Getty Images)

City officials are standing their ground in defense of the law.

"Delivery workers, like all workers, deserve fair pay for their labor, and we are disappointed that Uber, DoorDash, Grubhub and Relay disagree," Vilda Vera Mayuga, head of the city's Department of Consumer and Worker Protection, said in a statement reacting to the lawsuits.

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The Associated Press and Reuters contributed to this report.