New York City set to expand minimum pay law for delivery workers

Straits Times

2 days ago

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The delivery industry, which boomed during the Covid-19 pandemic, has continued to grow in New York City with more than 100 million deliveries from third-party apps.
NEW YORK – The New York City Council is expected to pass a package of bills July 14 expanding legislation that improved working conditions for food delivery workers to include nearly 20,000 grocery delivery workers.
A groundbreaking package of bills passed in 2021 set a minimum pay and addressed difficult working conditions for app-based food delivery workers, but only those who delivered food from restaurants through apps such as Grubhub, DoorDash and Uber Eats.
The new legislation will require third-party app companies, such as Instacart and Shipt, to pay grocery delivery workers a minimum of US$21.44 (S$27.46) an hour to match the increase food delivery workers received in April.
The bills, five in total, will also mandate that the companies provide an option in their apps to give at least a 10 per cent tip, before or at the same time an order is placed, and that the companies must pay workers within seven days of the end of a pay period.
The delivery industry, which boomed during the COVID-19 pandemic, has continued to grow in New York City with more than 100 million deliveries from third-party apps. According to the city's Department of Consumer and Worker Protection, there are around 60,000 restaurant delivery workers in addition to grocery delivery workers.
'It's a huge milestone to make app delivery work more dignified, better paid and safer in our streets,' said Ms Ligia Guallpa, a co-founder of Workers Justice Project. Her group organises Los Deliveristas Unidos, an advocacy group for delivery workers.
Mr James Parrott, a senior fellow at the Centre for New York City Affairs at the New School who consulted with the city on the delivery workers' pay, said there needed to be more improvements in the minimum pay standards.
But, he added, 'we shouldn't lose sight of the fact that these pay standards for delivery workers in New York City are the best pay standards that exist in the United States.'
Mr Juan Felipe, 30, a grocery delivery worker, said he had cut back working for Instacart because he was making only about US$2 to US$7 an hour, but he did not plan on rushing back anytime soon even if the legislation was passed.
'We have to see the conditions,' he said. 'I'm pretty sure if we get the rate, that would be amazing. But we have to consider how it's going to be.'
Mr Felipe said he would park outside Costco in Queens, just one of dozens of other gig workers waiting for possible gigs to appear in their apps.
Council member Sandy Nurse, a Democrat who sponsored the grocery delivery workers bill, said she had watched the delivery companies evolve over the years at the workers' expense.
'The apps are creating an environment that is unregulated, that doesn't have a lot of worker protections,' Ms Nurse said. 'Because a lot of these workers are predominantly immigrant workers, there's just a lot of opportunity for exploitation.'
On July 12, Grubhub said in a statement that it was working with advocacy groups and the City Council 'to make sure New York's delivery workforce is protected without sacrificing the flexibility customers expect.'
Instacart said in a statement: 'At a time when millions across the city are already struggling with rising costs for food and daily essentials, we urge the City Council to consider the real-world consequences this bill could have on the families and communities that depend on grocery delivery the most.'
Uber and DoorDash did not reply to a request for comment.
In 2023, Grubhub, along with DoorDash and Uber Eats, filed requests for a temporary restraining order just days before the initial increase of the minimum wage for food delivery workers, to US$17.96 per hour, was to take effect. The requests contended that regulators used inaccurate data to calculate compensation.
A judge ruled against the three food delivery companies, allowing the city to raise the workers' minimum wage to nearly US$18, and increase it further to US$20 or more in 2025.
The three companies had also filed a lawsuit in 2021, arguing that the city's 15 per cent cap on fees charged to restaurants for online orders and 5 per cent cap for other fees was unconstitutional and prevented them from negotiating their own prices with restaurants. The suit was settled in 2025 after the City Council made adjustments to the law that created some exceptions to the cap.
Although legislation would signify a victory for delivery workers, Council member Shaun Abreu, a Democrat and a sponsor of three bills in the new package, said he had noticed forms of 'retaliation' from third-party apps, like randomly deactivating workers' accounts and removing the tipping option at checkout.
Mr Abreu said he planned to introduce legislation to prohibit the abrupt deactivation of delivery workers by major third-party apps.
Mr William Medina, 37, who delivers for Uber Eats and is a member of Los Deliveristas Unidos, said he was very concerned about the 'thousands' of delivery workers who had recently been deactivated.
'This is a very critical issue that we're experiencing,' Mr Medina said. 'We just need somebody, a real person in the middle between the company and the worker who can decide very fair about the deactivation process.' NYTIMES