Workforce

NYC scales back proposed wage hike for delivery workers

Third-party couriers now stand to earn $19.96 an hour by 2025, nearly $4 less than what was originally proposed.
Grubhub bikes
The increase would start this year at $17.96 an hour. / Photograph: Shutterstock

Third-party delivery workers in New York City were on track for a massive raise in two years. On Tuesday, their potential hourly earnings got a little smaller.

The city’s Department of Consumer and Worker Protection (DCWP) is now proposing a $19.96 hourly minimum wage for app-based couriers by 2025, down from the $23.82 it floated back in November.

The department said the change is based on feedback from workers and delivery apps and accounts for the time workers are connected to more than one app. Couriers spend about 18% of their time “multi-apping,” according to a DCWP study. The new rate also adjusts for inflation. 

The department added that $19.96 is nearly three times what couriers currently make, which it calculated is about $7.09 before tips.

The increase is set to start this year at $17.96 an hour. DCWP will hold a hearing on the matter on April 7.

“Delivery workers, like all workers, deserve fair pay to support themselves and their families,” said DCWP Commissioner Vilda Vera Mayuga in a statement. “We are excited to establish a minimum pay rate and look forward to receiving additional public feedback on the new proposal.”

It’s the latest twist in a process that began in 2021, when the City Council ordered DCWP to issue a new minimum wage for delivery workers by Jan. 1 of this year. Los Deliveristas Unidos, a group representing those workers, on Tuesday urged the city to hurry up.

“We cannot wait any longer for the city to issue a final rule to establish the minimum pay,” said Antonio Solis, a leader of Los Deliveristas, in a statement. “By delaying this process, the City of New York is letting these delivery apps make millions in profits, while they pay us as little as $1 to $3 per delivery.”

The law would make New York one of the only places in the country to guarantee delivery workers a minimum wage. (Seattle enacted a similar law this year.) And even at the lower rate, it still represents a big threat to the business models of delivery companies like DoorDash, Uber Eats and Grubhub.

Asked about the proposal at an investor conference Monday, Uber CEO Dara Khosrowshahi downplayed the impact it would have on Uber Eats' business.

"New York delivery is about 2% of our overall volume on a global basis," he said, according to a transcript on financial services site Sentieo. "Whatever the outcome is, and we're hoping for the best outcome, we can make adjustments to our business to essentially, we think, be certainly net neutral from an EBITDA basis one way or the other."

Third-party couriers are classified as independent contractors and therefore not paid a minimum wage. They’re also not entitled to other benefits such as expense reimbursement and health insurance. The proposal seeks to help New York’s roughly 60,000 app-based delivery workers cover those costs.

The revised rule gives apps more flexibility in how they meet the minimum wage requirement. Apps that pay workers for all the time a worker is using the app (both waiting for orders and delivering them) will have to pay about 30 cents per minute, not including tips. Apps that only pay based on trip time will have to pay 50 cents per minute before tips.

UPDATE: This story has been updated to include comments from Uber's CEO. 

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