Lawsuits from Doordash, GrubHub, Uber, and Relay allege that the upcoming $17.96 hourly wage threatens their business
Just before app-based delivery workers in New York City were about to experience an hourly minimum wage increase, several tech companies launched legal action that has temporarily postponed this change.
On July 6, Doordash, GrubHub, Uber, and Relay filed lawsuits in Manhattan state civil court, arguing that the approved $17.96 hourly minimum wage for app delivery workers, scheduled to begin on July 12, would negatively impact their business and harm the workers themselves. According to the law, the minimum wage for app delivery workers would further rise to approximately $19.96 by 2025.
Judge Nicholas W. Moyne, who is handling the lawsuits brought by these companies, granted their request for a preliminary injunction the day after the suits were filed. This injunction prevents the implementation of the new minimum wage for a minimum of two weeks. Moyne has set a date of July 31 for hearing arguments regarding this temporary restraining order.
Advocates across the country are anticipated to closely monitor the progress of Moyne’s decision, considering it as a significant milestone in a complex and prolonged legal process. New York City’s labor regulations are commonly regarded as an indicator of what might be feasible in other areas, making these developments of great interest. Should New York City achieve success in its endeavors, it could inspire other localities to implement comparable regulations. Conversely, if the city’s efforts falter, concerns about challenging legal battles could dissuade officials elsewhere from adopting similar measures, according to advocates.
Elizabeth Saylor, the citywide director of The Legal Aid Society’s employment law unit, expressed that New York City’s objective is to safeguard these workers and guarantee their right to receive the minimum wage, just like any other workers.
Although a state-level lawsuit in New York would not establish a legal precedent beyond the state’s borders, the city’s reputation as a frontrunner implies that the outcome of this litigation could have dual consequences.
Ligia Guallpa, the executive director of Workers Justice Project, which leads a collective of delivery drivers known as Los Deliveristas Unidos, emphasized their desire for a minimum wage to alleviate their reliance on tips as their primary source of income. Local officials have stated that, taking into account their out-of-pocket expenses, delivery workers receive an average of $11 per hour after factoring in tips. This falls $4 short of New York City’s minimum wage of $15.
“The implications of this issue at a national level are significant because we are not only establishing a wage floor for delivery workers in New York, but we are also setting an example for the entire country in terms of establishing fundamental labor protections for app delivery workers and independent contractors. These individuals have been deliberately excluded from labor safeguards, such as minimum wage laws,” Guallpa stated. “This legislation will not only raise the minimum pay for app delivery workers but also improve the lives of thousands of workers who are currently barely making ends meet with poverty-level wages.
While advocates anticipate the forthcoming proceeding, delivery apps have expressed their satisfaction with the preliminary injunction. They have consistently affirmed their support for worker protections while opposing the implementation of the rule, but not its underlying intention. Grubhub stated that it is “pleased with the judge’s decision on Friday to postpone the enforcement of a rule that, if allowed to be enacted, would have significant adverse effects on delivery partners, consumers, and independent businesses.”
Regarding the injunction, Josh Gold, Uber’s senior director of public affairs, commented, “We hope to utilize this time to collaborate with the City and all stakeholders in order to develop a minimum pay regulation that does not have devastating consequences for couriers, consumers, and restaurants.” DoorDash also acknowledged the preliminary injunction as “an early and promising victory for consumers, local businesses, and delivery workers across New York City, safeguarding them from the harmful and long-lasting effects of an extreme earnings standard that emerged from a fundamentally flawed process.
New York City officials have voiced their disappointment regarding the preliminary injunction but remain hopeful for a favorable ruling from the judge. Vilda Vera Mayuga, the commissioner of New York City’s Department of Consumer and Worker Protection, expressed their dismay, stating, “We are extremely disappointed that the apps are postponing the implementation of the minimum pay rate. Currently, these apps pay workers well below the minimum wage, and this pay rate would make a significant difference in lifting thousands of working New Yorkers and their families out of poverty.”
Mayuga further added, “We eagerly await a prompt decision so that the fair and dignified pay rate that workers deserve is not further delayed unnecessarily.
