Nobody is happy with NYC’s $18 delivery worker minimum wage


Uber Eats delivery men ride bicycles
Image Credits: Photo by Tomohiro Ohsumi/Getty Images / Getty Images

New York City has established a new minimum wage for food delivery workers who deliver for platforms like Uber Eats, DoorDash, Grubhub and Relay. It should be a historic win for gig workers, but both delivery workers and companies are unhappy with it.

Many workers, labor rights activists and even the city’s comptroller say the minimum pay – just under $18 per hour – is not nearly enough to cover the costs of living in NYC or the costs of being a delivery driver. App-based gig companies say the ruling will cause unintended consequences for workers, and a spokesperson for DoorDash told TechCrunch that “litigation isn’t off the table.”

Of course, there are those who say that perfect shouldn’t be the enemy of good, and plenty of delivery workers are in support of the ruling. NYC’s delivery workers currently make about $7.09 an hour on average, according to a release from the city, so the new ruling is certainly a step up. But it’s clear that this contentious issue will further divide the two camps.

Companies that use delivery workers will get to choose between one of two minimum pay rate options outlined by the city. The first option requires companies to pay a worker at least $17.96 per hour, excluding tips, for time spent connected to the app, which includes time spent waiting for a gig. This will increase with inflation next year to about $19.96 per hour.

The other option involves apps paying $0.50 per minute of active time, exclusive of trips. Active time happens from the moment a worker accepts a delivery to the moment they drop off the food.

While none of the gig companies specified which method of payment they might follow, industry experts have their money on the $0.50 per active minute option. Paying per active minute is already written into how these companies do business in many locations.

In California, where Proposition 22 is the law of the land, companies are guaranteed to pay at least 120% of the local minimum wage for active miles. If the minimum wage is $14 per hour, a delivery that took 15 minutes door-to-door would earn a worker $4.20.

Too little too late

Many deliveristas – the community of app-based delivery workers – and labor rights activists argue the city is about six months late in ruling on a delivery worker minimum pay rate and that the revised set of rules is a reduction from the initially proposed pay formula. In November, the city had proposed a minimum pay of $24 per hour.

The $18 per hour pay rate will end up looking more like around $13 per hour after expenses, according to a statement from NYC Comptroller Brad Lander.

In September 2021, the Department of Consumer and Worker Protection (DCWP) passed Local Law 115, which set a January 1, 2023 deadline to set a minimum pay rate for deliveristas. In public comments, many gig workers said they should be back paid for the last half a year.

“City Hall acquiesced to the lobbying of multibillion-dollar app companies, delaying the raises owed to deliveristas six months ago and setting a sub-minimum-wage standard that pads corporate profits off the backs of some of the hardest workers in our city,” said Lander in a statement.

Lander went on to say that workers should be paid at least the minimum wage after expenses. Most deliveristas drive a moped or e-bike in NYC and not all own their own vehicles. Services from companies like Joco, Zoomo and Whizz offer daily, weekly and monthly rentals. Joco’s network of docked e-bikes are available for $65 per week. Whizz and Zoomo provide e-bike subscriptions for $179 per month and $199 per month, respectively.

“There is no doubt that this is a positive step forward, but the pay issue has been researched and studied, and this is simply not enough money for this job,” Veena B. Dubal, professor of law at the University of California College of the Law, San Francisco, told TechCrunch. “This is dangerous work, and the cost of living in NY is quite high. The predictability and raise it will offer workers is welcome, but, again, it’s just not enough.”

The general sentiment among deliveristas who submitted open comments to the proposal mirrors Dubal’s. Many have said they suffered accidents, theft and assaults while on the job, none of which is covered by the companies because workers are still considered independent contractors.

“Now that we are about to achieve the minimum wage, the new challenge will be for these companies to comply with the proposal issued by the city, so it is important to highlight the importance and also the responsibility that we workers have to denounce, report any abuse that these companies may have in this process of change that must now be in favor of us workers,” wrote a worker named Vik. “It is a historic moment that after years of free labor now thousands of people will benefit.”

Here’s why Uber investors are cheering its Q1 earnings results

Working hard or hardly working

Companies, meanwhile, argue that the ruling will have adverse effects on delivery workers. Spokespeople from DoorDash and Grubhub said that having a minimum wage would require the companies to make platform changes that may harm gig workers.

For example, the companies might start reducing platform access for workers who don’t accept every gig or who work part time. Those who remain on the platform will have to work almost twice as hard. A study from the DCWP projects that deliveries will increase from 1.6 to 2.5 per hour.

“The city is lying to delivery workers – they want apps to fund this increase by eliminating jobs and reducing tipping while forcing the remaining workers to deliver orders faster,” said Josh Gold, an Uber spokesperson.

While gating access to the platform for part-time workers is certainly a potential outcome, Sergio Avedian, senior contributor at The Rideshare Guy and self-proclaimed UberEats “cherry picker,” says demand for delivery workers is probably high enough, especially in NYC, for there to remain a mix of full and part-time workers.

“Uber is saying, ‘Now, we’re gonna force these people to run their asses off,’” said Avedian. “Well, they’re doing that anyway in NYC.”

Companies may also have to make platform changes to ensure workers aren’t being paid double time by different apps. Many gig workers do what Avedian calls “dirty apping,” which means swapping between apps to pick up as many gigs as possible. Avedian thinks companies will track workers’ locations more efficiently to be able to catch them picking up orders for other apps on the sly.

“They may put in these restrictions on workers, telling them they must take every order now that I’m paying your minimum wage. No cherry picking,” said Avedian.

Making sure delivery workers stay loyal to each platform will help keep things tidy for app companies, but it also might lead into the slippery slope of employment. Because if a worker can only work for one company and is required to fulfill every order that is sent to them, then it’s much harder for app companies to make the case that workers are still independent contractors.

Avedian also pointed out that the ruling doesn’t include any caveats of delivery workers giving up the right to collective bargaining or unionizing, nor does it imply that workers agree to stay independent contractors.

“In most places where Uber agrees to a rate hike for drivers, the drivers gave up their rights and said, ‘Okay, we’re gonna stay independent, just give us higher rates,’” said Avedian. “All of these gig companies are concerned now and they’re trying to nip it in the bud at the start of something.”

Correction: A previous version of this article stated that Joco’s weekly rentals gave drivers six-hour rental periods. Joco has clarified that the rentals are unlimited, but that individual bikes need to be docked every six hours.

Uber, Lyft to pay NYC drivers more by end of year

More TechCrunch

Another fintech startup, and its customers, has been gravely impacted by the implosion of banking-as-a-service startup Synapse. Copper Banking, a digital banking service aimed at teens, notified its customers on…

Teen fintech Copper had to emergency discontinue its banking, debit products

3D tools behemoth Autodesk has acquired Wonder Dynamics, a startup that let creators quickly and easily make complex characters and visual effects using AI-powered image analysis. The two companies have…

Autodesk acquires AI-powered VFX startup Wonder Dynamics

Farcaster, a blockchain-based social protocol founded by two Coinbase alumni, announced on Tuesday that it closed a $150 million fundraise. Led by Paradigm, the platform also raised money from a16z…

Farcaster, a crypto-based social network, raised $150M with just 80K daily users

Microsoft announced on Tuesday during its annual Build conference that it’s bringing “Windows Volumetric Apps” to Meta Quest headsets. The partnership will allow Microsoft to bring Windows 365 and local…

Microsoft’s new ‘Volumetric Apps’ for Quest headsets extend Windows apps into the 3D space

The spam reached Bluesky by first crossing over two other decentralized networks: Mastodon and Nostr.

The ‘vote Trump’ spam that hit Bluesky in May came from decentralized rival Nostr

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220M seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal action against the U.S. government, that means shaping up its…

As a US ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

7 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI

London-based fintech Vitesse has closed a $93 million Series C round of funding led by investment giant KKR.

Vitesse, a payments and treasury management platform for insurers, raises $93M to fuel US expansion