Uber, DoorDash, and Grubhub will face massive financial implications after the companies were unsuccessful in a bid to block a new minimum pay rule in New York.
The companies attempt to overturn the rule were rejected by a state appeals court on Thursday, Nov. 30, according to a Bloomberg report. The new rule requires the companies to pay their delivery drivers a minimum of $17.96 per hour under the new rule or a rate of 50 cents a minute per delivery.
"Today’s court decision is yet another promise made and promise kept by our administration on behalf of working New Yorkers, and it is a powerful tool to hold apps accountable," New York City Mayor Eric Adams said in a statement on Thursday. "This minimum pay rate will guarantee our delivery workers and their families can earn a living and keep our city’s legendary restaurant industry going strong.”
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The law also indicates that a second raise in minimum wage is expected by April 2025, pushing the hourly salary to almost $20 per hour for app delivery workers.
There are about 60,000 app delivery workers in the city, though they only receive about $11 per hour after tips and other expenses, which is less than the $15 minimum wage in the city, according to Bloomberg.
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It's unclear how the food delivery companies will respond to the new requirement, including whether consumers will end up seeing rising delivery costs. Bloomberg reported that Uber's senior director of public policy Josh Gold has said that the wage hikes "eliminates jobs, discourages tipping, and forces couriers to go fast and accept more trips."
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