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The judge postpones the introduction of the minimum wage bill for the delivery worker

The judge postpones the introduction of the minimum wage bill for the delivery worker

A planned pay raise for tens of thousands of delivery workers hit a roadblock on Friday, after a Manhattan judge stopped enforcement of a minimum wage law — days before it was due to take effect.

Manhattan Supreme Court Justice Nicholas Moen A Temporary restraining order A day after DoorDash, Grubhub, Uber and Relay sued to stop the new law that was supposed to go into effect on July 12th.

Four app-based delivery companies — which account for nearly all food deliveries in the city — aim to stop a law that requires them to start paying delivery workers $17.96 an hour and make New York the first major US city to implement a wage requirement for delivery workers of 60,000 workers.

By siding with Uber Technologies, Moyne’s order temporarily overrides the Department of Consumer and Labor Protection’s June 12 rule that would have provided a sizable boost from the $11 per hour delivery workers currently earn.

It is not clear when or if the new wage rate will take effect.

The head of the Department of Consumer and Labor Protection said in a statement that she was “extremely disappointed” by the delay in implementing the minimum wage rate.

“These apps currently pay workers well below minimum wage, and this wage rate will help lift thousands of working New Yorkers and their families out of poverty.” said Vilda Vera Mayuga, head of the city agency that carried out the rulemaking process. “We look forward to a speedy resolution so that the decent rate of wages which workers deserve to earn is not delayed any longer than necessary.”

Los Deliveristas Unidos founder Sergio Agchi called Moen’s decision “disappointing” and “sad”.

“These companies have the ability to pay the city’s proposed minimum wage rate — it’s all a game for them,” he said in a phone interview. “They will continue to twist the arm because they have the money and the power to do so.”

Agchi added that filing lawsuits within a week with record heat made the decision even more frustrating. “This is about honoring the work of the 60,000 people who risk their welfare on the streets every day.”

In separate statements, spokespeople for Uber, DoorDash and Grubhub all cheered Moen’s decision.

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“Today’s decision is an early and promising victory for consumers, local businesses and delivery workers across New York City, protecting them from the harmful and lasting effects of a egregious profit standard that resulted from a fundamentally broken operation,” Eli Scheinholtz, a spokesperson for DoorDash, said.

“We hope to use this time to work with the city and all stakeholders to figure out a minimum wage rule that doesn’t have dire consequences for ride-hailing companies, consumers and restaurants,” said Josh Gold, an Uber spokesperson.

The lawsuit, filed separately in Manhattan Supreme Court, is challenging a local law that would increase the hourly rate to $19.96 — before tips — by April 2025. The bump also takes into account operating costs, including bikes, equipment, and insurance.

In legal filings and statements filed with the city, the companies say they do not, in general, oppose efforts to increase workers’ wages. But the companies claim the law would force them to pass extra costs on to consumers and possibly alienate business — and claim city bias in the rulemaking process.

“For New York City consumers, this would mean — according to DCWP’s own analytics — an average fee increase of $5.18 per order across the industry, representing a 15% increase in current costs,” lawyers for DoorDash and Grubhub charged in the papers. court. “For New York City restaurants and other merchants, it will mean losing access to valuable delivery services that merchants—particularly small, independent merchants—cannot replace on their own.”

Relay, an app popular among “Deliveryistas,” argued in court filings that it should not be included under the law because it already pays couriers on an hourly basis — and that the law could put the company out of business.

The four companies argue that the city’s DCWP did not objectively survey the industry and workforce during the rulemaking process, and that the law discriminates against app-based food delivery platforms by not including grocery delivery platforms under the rule.

DoorDash and Grubhub filed a joint petition, while Uber and Relay each filed separate lawsuits. The four companies account for 99% of app deliveries in the city, according to estimates from the city. DoorDash, Grubhub, and Uber respectively own or operate Caviar, Seamless, Postmates, and other popular delivery apps.

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In a statement, DoorDash said the company and “peers in the industry” are suing the city to “send a clear and unequivocal message that bad policies cannot go unchallenged, and we will not stand by and let these harmful effects go unchecked for the communities we serve.”

Late arrival

The prospective law came after years of legislative and rule-making process. The pay scale is set by a 2021 local law that requires a minimum wage for app-based food delivery workers.

The minimum wage law was supposed to go into effect in January, but the Adams administration reversed course earlier this year, reopening the general rule-making process after an intense campaign from several big delivery companies. The retraction delayed the implementation of the law by about six months.

“We’re not surprised to hear that they’re still unhappy,” Ligia Gualpa, a delivery worker’s attorney, said of the companies. Guallpa is the executive director of Los Deliveristas Unidos’ parent organization. “I think they will continue to do everything they can to pay the workers as little as possible, or they will continue to delay the process.”

City Comptroller Brad Lander, who, as a city councillor, introduced the bill imposing minimum wage standards, said companies are “seeking to extract every penny they can from the delivery people whose work they depend on: that’s the gig business model.”

DoorDash and Grubhub’s joint petition came one week after DoorDash announced it would do so Transforming its business model nationwidegiving workers the option to pay workers from $10 to $19 an hour—although workers in New York, California, and Seattle are excluded, all of which have passed laws setting minimum wage standards for workers.

The two companies also argue that the city conducted “biased and unreliable” surveys of workers and industry stakeholders in order to draft and set rules, and that the law unfairly discriminates companies by excluding grocery delivery platforms, such as Instacart.

“If this rule is allowed to stand, it will have devastating consequences for delivery partners, consumers and independent businesses,” said Grubhub spokeswoman Lisa Dee. “Grubhub commends the city’s interest in this problem, but we cannot support a solution that has unintended effects on those who depend on food delivery.”

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Meanwhile, Relay argues in court filings that it should have been excluded from the law because its business model differs from industry giants DoorDash, Grubhub and Uber.

As a platform that connects restaurants directly to delivery companies, Relay does not have a consumer-facing app, and therefore cannot reimburse costs associated with increased wages to customers — a situation that could put the company in a “death spiral,” according to the lawsuit.

“Relay strongly supports the rights of food delivery people in New York City to earn a living wage,” said Matt Miller, a spokesperson for the company, in a statement to THE CITY. “However, we believe Relay has been misclassified with other companies in the space.”

Likewise, Uber argues, in a separate lawsuit, that the law would be bad for business, and the estimate for orders placed on the app could drop by as much as 18%.

“The entire city rule is based on the false assumption that restaurants don’t make any money from deliveries,” Uber spokesman Josh Gold told The CITY Thursday. “It should be paused before it harms the restaurants, consumers and couriers it purports to protect.”

The companies also claim that the law will strip workers of their flexibility in choosing when and how they pick up orders because the law allows companies to pay workers by the hour rather than per trip.

But as the DCWP said in March, the rules allow companies “flexibility in how they meet minimum wage requirements” by choosing to pay workers an hourly wage or a per-delivery rate divided by the minute — a controversial compromise from the city after collecting feedback from the companies.