New York City has announced a significant increase in the minimum pay rate for app-based food delivery workers, aiming to address the rising demand for services such as Uber Eats and DoorDash since the onset of the pandemic.
With an estimated 60,000 food delivery workers in Manhattan alone, the current average hourly wage of $7.09 falls far below the city's new minimum pay rate of at least $19.96 per hour.
This increase is expected to provide greater economic stability for delivery workers and support the thriving restaurant industry in the city.
Higher Minimum Pay to Boost Delivery Workers' Earnings
The City reports that starting July 12, 2023, the new pay rate will be implemented, initially raising the hourly wage to $17.96. By April 2025, it will further increase to nearly $20 per hour.
To ensure the pay remains equitable, adjustments will be made annually to account for inflation. The city's decision to grant delivery apps flexibility in payment methods is intended to strike a balance between worker earnings and operational efficiency. As long as the minimum pay rate is met, apps can choose to compensate workers per trip, per hour worked, or using their own formula.
Mayor Eric Adams of New York City conveyed his approval for the measure, affirming that delivery workers have consistently fulfilled their duties, and now it is time for the city to reciprocate their dedication. He highlighted the importance of the increased minimum pay rate, which will allow workers and their families to earn a living wage while contributing to the stability of the city's renowned restaurant industry.
Ligia Guallpa, the executive director of the Worker's Justice Project, an organization dedicated to advocating for delivery workers, welcomed the news, stating that the minimum pay rate will transform the lives of thousands of families across the city. However, not all parties are in agreement with the new policy.
DoorDash released a statement expressing concerns over the city's extreme policy and its potential consequences, stating that it surpasses the standards applied to other industries. Although DoorDash does not oppose a minimum wage for delivery workers, the company is contemplating litigation to challenge the decision.
According to Gothamist, Uber Eats also voiced its discontent, accusing the city of being dishonest with delivery workers. The company emphasized that the new policy could lead to job cuts, discourage tipping, and pressure couriers to work faster and accept more trips.
Uber Eats added that these measures would be necessary to cover the increased costs associated with the higher minimum pay rate.
Pandemic Surge and Infrastructure Challenges Prompted Action
The surge in delivery orders during the pandemic underscored the need for improved support and infrastructure for food delivery workers.
As per CNN, in 2019, delivery accounted for approximately 7% of total restaurant sales in the United States, a figure that rose to nearly 9% in 2021, surpassing pre-Covid levels, according to Euromonitor International.
New York City faced challenges in managing the growing number of workers and the lack of necessary infrastructure, resulting in difficulties for both workers and residents. Issues such as limited parking spaces during rainy weather and inadequate access to restrooms plagued delivery workers.
Efforts were made to address these concerns, including the establishment of more bike lanes, new regulations regarding bathroom access, and ongoing campaigns to enhance safety surrounding electric bikes and scooters.
The recent decision to implement a higher minimum pay rate for food delivery workers aligns with Local Law 115, enacted in 2021, which mandated a study on delivery worker pay and treatment by the Department of Consumer and Worker Protection.
Furthermore, the city administration, in collaboration with Los Deliveristas Unidos, plans to repurpose vacant newsstands as shelters for delivery workers, offering them a place to rest and charge their electric bicycles and phones.
