According to officials, New York City will impose a minimum wage rate for food delivery drivers on apps like Uber Eats and DoorDash, a first in the United States.
The city mayor Eric Adams has made the new law to set the minimum wage rate for food delivery drivers at $17.96 per hour starting from July 12 in New York. Mainly, such a law implementation will impact the number one players like Doordash, Uber and many more. Somewhere, such a decision will end up in the tug of wars like Uber eats vs Doordash, Grubhub vs DoorDash, Postmates vs Doordash etc based on who provides better pay rates to their food delivery personnel.
“New York City is setting a new tone for the USA,” Adams said in the news conference where he announced the new minimum wage rate law. In New York, there are approximately 60,000 food delivery workers earning $7 per hour on average without tips. They would mainly get the raise, as per the press release from the mayor’s office.
In a statement given by Mayor Adams,” Our delivery workers have delivered to us, now we are going to deliver them”. He added,” This new minimum pay rate, up by almost $13 per hour, will guarantee that workers and their families can earn a living, access greater economic stability, and help keep our city’s legendary restaurant industry thriving”.
Meanwhile, there are chances of DoorDash taking legal action against such a policy implementation, as they have stated by calling it “extreme”. A spokesperson from Grubhub also mentioned that such a decision would have “serious adverse consequences” on the delivery workers. Meanwhile, Uber also stated their concerns by saying,” They are telling apps: eliminate jobs, cancel tipping, force couriers to go faster and accept more trips”.
Although, there are mixed reactions regarding such a labor law implementation amidst this let’s know how this is going to be commenced from July through digits.
The implemented new rates for food delivery workers will be bifurcated in this way:
Such a mandate pay per minute for the NYC delivery food workers is for the one using apps. Besides, it has compensation for both waiting for trips and delivering food.
The mandated pay per minute for NYC delivery food workers using the apps can be compensated while delivering the food.
The approximate time for delivering trips, according to the NYC Department of Consumer and Worker Protection(DCWP), with the other 40% of pay by the time of standby.
The study shows that pioneer apps can make some changes, like the Doordash business model, which can be reframed in the sense of driver’s pay. Further, the study states,” app can tighten limits on access to their platforms, better matching supply to the demand” and “incentivize productivity”.
For example, some pioneer food delivery platforms give drivers preferential access based on how often that driving personnel tends to accept the job. Moreover, as per the current rule, the apps can make this a practice.
Food delivery apps might also shift the workers instead, allowing them to log on to the app whenever they want. It could inappropriately impact casual workers. Besides, DoorDash also said that many of its delivery workers are working as part-time or full-time workers, which supplement their income through such jobs. Food delivery apps are finding it a hamper in flexibility and earnings potential for drawing gig workers.
DoorDash also described such a decision as “misguided” and said the company was never against the minimum wage standards.
Grubhub reacts that decisions tend to be taken with “Good Intentions”, but in the long run, it might face “Adverse conditions for delivery workers in New York City”.
The new pay structure will also impact the diners in that sense.
It will enable the consumers to pay increased fees for higher labor costs. The potential increase in the cost will be around $5.18 per order.
Moreover, such apps could offset higher customer fees by mainly discouraging or eliminating tipping. As per the study, if this might be the conclusion for implementation then such labor laws can adversely affect the food delivery industry.
During the peak time of Covid-19, people found it critical to step out of their houses. At that time, food delivery workers did a commendable job by bringing meals, groceries and other essentials to the people’s doorsteps. Besides, the pandemic phase also revealed how delivery workers suffer as they lack basic labor protections.
In that phase, the Workers Justice Project took its first step towards inception with a goal to do better for such food delivery personnel through a Brooklyn-based work center. Mainly, they began organizing the delivery workers to fight for better pay and conditions. These efforts gave the epic rise to a group called Los Deliveristas Unidos.
Thus, the campaign’s and efforts made by WJP, Deliveristas and others throughout the pandemic resulted in the start of landmark legislation in New York City in October 2021. Besides, that led to creation of minimum wage protection rules and laws.
The end goal of Deliveristas was to get a minimum rate of $30 per hour wage rate. Whereas the municipal government first proposed a $24 per hour wage rate, they went down to the current rate of $17.96 per hour minimum wage rate that now applies from July in New York City. Now, the immense happiness of WJP, Deliveristas and others are sky-high as they are celebrating the win that has become possible through years of effort. Somewhere for them, Justice has been served now!
The executive director of the WJP project, Ligia Gullapa, said,” This rule will set the pay floor for all the essential deliveristas who have worked tirelessly, whether it’s pandemic, a snow storm or wildfire smoke and justice is served for delivery persons who have been denied a living wage for far too long”. He also added,” Now, these workers who keep millions of New yorkers fed will know they can keep their families fed too”.
Amidst all these, this minimum wage rate rule is all set to commence from July 12 for food delivery workers.
Jenny is a writer by heart. She loves to travel and gain new experiences. A qualified engineer at aPurple by profession, Jenny is also a wellness specialist with many years of experience. She is someone who loves to share her learnings that she has gained in her pathway to success. Also, mental health is one of the main causes she supports, hence most of her work is in the non-fiction genre. She radiates positivity and good vibes wherever she goes.