"Tech companies block wage increase for New York City delivery workers", 12 July 2023

A week before New York City’s app-based delivery workers were poised to see an hourly minimum wage increase, several tech companies fired a legal salvo that has temporarily delayed this change.

Doordash, GrubHub, Uber and Relay filed lawsuits in Manhattan state civil court on 6 July, alleging that a recently greenlit $17.96 hourly minimum wage for app delivery workers – set to start on 12 July – would deal a blow to their business, also claiming it would harm this legion of workers. Under the law, the minimum wage would increase to some $19.96 for app delivery workers in 2025.

One day after the suits’ filing, Judge Nicholas W Moyne, who is presiding over these companies’ respective cases, granted their request for a preliminary injunction that blocks the new minimum wage from going into effect for at least two weeks. Moyne has scheduled arguments on this temporary restraining order for 31 July.

While Moyne’s decision on this is just one of many steps in what will probably be lengthy, complicated litigation, advocates nationwide are expected to keep a close eye on developments, as New York City’s labor regulations are often seen as a bellwether for feasibility elsewhere. If New York’s efforts succeed, other municipalities might feel emboldened to enact similar regulations – but if they fail, concerns about onerous legal battles might deter officials elsewhere from following Gotham’s lead, advocates say.

“The judge’s decision is already having an impact on workers’ rights, because it will delay the implementation of the increased wages for at least two weeks,” Saylor also said, noting that the delivery drivers are “overwhelmingly people of color and immigrants.”.

Ligia Guallpa, executive director of Workers Justice Project, which helms a group of protection-seeking delivery drivers called Los Deliveristas Unidos, said they want minimum pay so as not to rely on tips as their main source of income. Local officials have said that delivery workers receive approximately $11 hourly after tips, given their out-of-pocket expenses – which is $4 less than New York City’s minimum wage of $15.

Guallpa said advocates hoped for a “quick decision in establishing a pay rate, so that workers can earn a living wage without any further delay”.

Camron Dowlatshahi, a California attorney with Mills Sadat Dowlat LLP, whose work has included wage and hour violations as well as other employment disputes, said that the west coast state and New York’s respective efforts could have ripple effects elsewhere.

As advocates await the upcoming proceeding, delivery apps have expressed satisfaction with the preliminary injunction; they have largely insisted on their support of worker protections, maintaining they oppose the rule’s implementation, but not its intent. Grubhub said it was “pleased with the judge’s decision on Friday to delay implementation of a rule that, if allowed to stand, will have serious adverse consequences for delivery partners, consumers and independent businesses”.

Commenting on the injunction, Uber’s senior director of public affairs, Josh Gold, said: “We hope to use this time to work with the city and all stakeholders to figure out a minimum pay rule that doesn’t have devastating consequences for couriers, consumers and restaurants.” DoorDash similarly said the preliminary injunction was “an early and promising victory for consumers, local businesses and delivery workers across New York City, protecting them from the harmful and lasting impacts of an extreme earnings standard that resulted from a fundamentally broken process”.

New York City officials have expressed dismay over the preliminary injunction but hope that the judge will soon rule in their favor.