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Uber, DoorDash, and Grubhub Sue New York City on Minimum Wage Law

Uber, DoorDash, and Grubhub Sue New York City on Minimum Wage Law

Three food delivery giants are suing New York City to block minimum wage standards for gig workers, arguing that regulators used faulty data to calculate the new compensation rules.

Uber, DoorDash and GroupHub on Thursday filed for a temporary restraining order in state supreme court in Manhattan to stop the wage changes from taking effect on July 12. same.

The new wage standard, announced last month, would require gig platforms to pay food delivery workers $18 an hour and increase that amount to $20 an hour by 2025. Delivery workers currently make about $11 an hour, according to city estimates.

But Uber and other gig companies say they will have to pass on the cost of higher wages to consumers by raising prices. They argue that the city’s modeling does not correctly calculate the degree to which these high prices will hurt local restaurants. They say the new system will work to disadvantage providers because, to control costs, the company will have to closely monitor the amount of time they spend online on apps but not actually delivering.

“The rule must be paused before it harms the restaurants, consumers and delivery companies it claims to protect,” Josh Gold, a spokesman for Uber, said in a statement.

In a prepared statement, Vilda Vera Mayuga, commissioner of the New York City Department of Consumer and Labor Protection, defended the new wage standard.

“Deliveries, like all workers, deserve fair pay for their work, and we’re disappointed that Uber, DoorDash, Grubhub and Relay don’t agree to that,” she said. “These workers brave thunderstorms, extreme heat events and risk their lives to meet the needs of New Yorkers — and we remain committed to helping them.”

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The suit was It was reported earlier by the Wall Street Journal.

The skirmishes over New York delivery worker pay are part of a long-running struggle between gig companies and labor activists across the country over the compensation and treatment of workers. The providers are independent contractors, which means they receive no minimum wage or health care benefits and are responsible for their own expenses. Uber and other companies in the field say workers value flexibility in their own hours and independence, but labor groups say they are being exploited and deserve better protection.

Delivery workers themselves have long complained that they are not being fairly compensated for the hard and sometimes dangerous work of ferrying passengers and food around cities for hours each day. In general, caterers tend to make less money than workers driving people.

Ligia Guallpa, executive director of the Labor Justice Project, a labor advocacy group that pushed for the law, called the lawsuits “preposterous,” adding that the legal maneuvering “comes at the expense of workers who can barely survive in a city facing a affordability crisis.” colossal costs.”

Some states have already enacted minimum wage standards. In California, gig companies supported Proposition 22, a ballot measure passed by voters in 2020 that offered delivery workers a minimum wage and other limited benefits while preventing them from being classified as employees. The Washington state legislature passed a similar law last year, and Seattle has had a minimum wage law for temporary service employees since 2020. Earlier this year, the Minnesota legislature passed a bill guaranteeing a minimum wage for gig drivers, but Uber and Lyft They threatened to leave everyone. or part of the state in response, the state’s governor, Tim Walz, vetoed the legislation.

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In New York, the $18-per-hour pay rate was already a compromise, after abandoning an earlier plan to pay delivery workers $23 per hour. Terri Gerstein, a worker’s rights attorney at Harvard Law School’s Job Center, said she believes freelancers will face an uphill battle in court.

“The city has been very serious and careful about enacting this wage standard,” she said. “Uber and the other companies would have to prove that the city was ‘wild and volatile’; based on the record, it would be very difficult for them to do so.”