ALEXANDRIA, Va.—New York City will soon require all third-party food-delivery apps to pay their gig workers a minimum wage of eventually $19.96 per hour, reports CNN. Food delivery workers in the city currently make $7.09 an hour on average.
The new pay rate will increase to $17.96 an hour on July 12 and then increase to nearly $20 an hour in April 2025. The pay will be adjusted annually for inflation.
“Our delivery workers have consistently delivered for us—now, we are delivering for them,” New York City Mayor Eric Adams said in a statement. “This new minimum pay rate, up by almost $13.00/hour, will guarantee these workers and their families can earn a living, access greater economic stability and help keep our city’s legendary restaurant industry thriving.”
Food delivery companies like Uber Eats and Grubhub can choose how their workers receive the minimum pay—by the trip or per hour—as long as they are making the minimum wage.
According to the statement, apps that pay workers for all the time a worker is connected to the app (the time waiting for a trip and trip time) must pay at least $17.96 per hour in 2023, which is approximately $0.30 per minute, not including tips.
Apps that only pay for trip time (the time from accepting a delivery offer to dropping off the delivery) must pay at least approximately $0.50 per minute of trip time in 2023, not including tips.
The food-delivery apps are pushing back against the “extreme policy,” as DoorDash described the new measure.
DoorDash is considering litigation to push back against the new requirements, saying the company goes beyond the standards other industries are held to, although it’s not opposed to a minimum wage for delivery workers.
“Today’s deeply misguided decision by the DCWP ignores the unintended consequences it will cause and sadly will undermine the very delivery workers it seeks to support,” a spokesperson for the company told CNN. “Given the broken process that resulted in such an extreme final minimum pay rule, we will continue to explore all paths forward—including litigation—to ensure we continue to best support Dashers and protect the flexibility that so many delivery workers like them depend on.”
Uber Eats said the city is not “being honest with delivery workers” in a statement. Uber also owns Postmates.
“They are telling apps: eliminate jobs, discourage tipping, force couriers to go faster and accept more trips—that’s how you’ll pay for this,” Josh Gold, a spokesperson for Uber Eats, said in a statement.
In September 2021, the New York City Council passed Local Law 115, requiring the New York City Department of Consumer and Worker Protection (DCWP) to study the pay and working conditions of app-based restaurant delivery workers and to establish a minimum pay rate for their work based on the study results.
DCWP published its study last year, which drew from data obtained from restaurant delivery apps, including DoorDash, Grubhub, Uber Eats and Relay, surveys distributed to delivery workers and restaurants, testimony, extensive discussions with stakeholders on all sides and publicly available data. Members of the public, delivery workers and restaurant delivery apps submitted thousands of comments on the proposed minimum pay rule, which DCWP carefully considered in developing the final rule, according to the mayor’s statement.
Earlier this year, Walmart raised its starting wage for all U.S. store and warehouse employees to at least $14 an hour, up from $12 an hour. Target pays its workers at least $15 an hour and up to $24 an hour depending on the market, and Target employees have access to flexible scheduling, well-being benefits, team member discounts and other perks. Amazon recently announced an investment of $450 million in wage increases and other benefits for drivers who are part of its Delivery Service Partners network. Starbucks starts pay at nearly $17 an hour, and Costco workers get at least $17.50 an hour.
Convenience retailer Rutter’s, based in York, Pennsylvania, recently announced another increase to its starting wage, with pay beginning at $17.50 per hour. This is the company’s second increase of the year, and seventh in three years.
These starting hourly wages are higher than the convenience store industry average. In 2022, the average full-time associate wage at a convenience store was $14.33 an hour, according to the NACS State of the Industry Compensation Report of 2022 Data.
For more insight into retail delivery and what it can do for you and your customers, read more about Elevating Convenience Retail Delivery: Understanding Shopper Preferences.