Uber Eats, Grubhub, DoorDash Sue NYC Over Ruling To Increase Worker Pay

After a huge move by the city of New York to establish a minimum wage for food delivery workers for the first time ever, some employers are now pushing back. Uber Eats, Grubhub, DoorDash, and Relay are suing the city over the increase that would bump up pay rates for food couriers from a current base of $7.09 per hour to a new minimum wage of $17.96 per hour. This move was intended to begin on July 12, but the coalition of companies involved in the suit are calling for a temporary stay.

Though the apps have flexibility as to how they choose to meet the minimum wage requirement, the companies continue to insist that the new mandate will force them to raise prices, limit delivery areas, and increase the number of delivery trips being made, meaning longer wait times.The suit comes as Uber and DoorDash both predicted in May to have increased annual profits for fiscal year 2023, following another year where revenues exceeded expectations, much of it spurred on by consumer activity during and post-pandemic.

It also comes at a time that executives are making healthy seven-figure salaries, with the vast majority of pay for most C-suite level employees coming from stocks. For example, Prabir Adarkar, current COO and former CFO at DoorDash, made a base salary of $350,000 in 2022, but received over $9 million in stock awards for a total compensation of $10.3 million.

There have been heated reactions to the lawsuits

Commissioner for New York City's Department of Consumer and Worker Protection Vilda Vera Mayuga is holding firm that food delivery workers, who are technically independent contractors, "deserve fair pay for their labor," (via The New York Times). Comptroller Brad Lander, who first introduced the bill into New York legislature, had harsh words for the companies suing the city, saying they "are out to extract every penny they can from the delivery workers whose labor they rely on: that's the gig business model," (per The City). The minimum wage baseline, for pay before accounting for tipping your food delivery person, was not random — the city of New York did extensive data-driven research to arrive at a fair figure, though DoorDash claimed it was a "flawed process," reports CNN.

Companies like Uber Eats, Grubhub, and DoorDash insist that workers appreciate the flexibility that comes from not being officially employed, despite the lack of protections, health care, and base pay. However, unions, labor activists, and workers alike contend that all things considered, the arrangement is exploitative. In a statement shared on Twitter, Los Deliveristas Unidos, a labor union at the forefront of this fight, called the lawsuits "unconscionable" and said that they come "at the expense of workers who can barely survive in a city facing a massive affordability crisis," and vowed to continue to fight for a living wage for workers.