Uber, DoorDash and Grubhub sue New York City over $18 minimum-wage law

Uber, DoorDash and Grubhub are suing for an injunction to stop New York City’s new $18 minimum wage law for food delivery app workers, The Washington Post has reported. The app delivery platforms are asking for a temporary restraining order against the new rules, set to be implemented on July 12th. “We will not stand by and let the harmful impacts of this earnings standard on New York City customers, merchants, and the delivery workers it was intended to support go unchecked,” a DoorDash spokesperson told CNN

The Worker’s Justice Project that backed the survey decried the new lawsuit. “This latest legal maneuver to prop up their business model comes at the expense of workers who can barely survive in a city facing a massive affordability crisis,” director Ligia Guallpa told the Post.

New York became the first US city to mandate a minimum wage for food delivery workers, ordering platforms to pay workers $17.96 per hour, plus tips, by July 12th. The minimum wage in the city is $15 per hour, but the extra amount accounts for the fact that delivery workers are usually paid as contractors, so have higher taxes and must pay work-related expenses out of pocket. According to an estimate from the DCWP (NYC Department of Consumer and Worker Protection), NYC has more than 60,000 food delivery workers who earn an average of $7.09 per hour. 

However, DoorDash and GrubHub argued that the earnings estimate was based on flawed methodology. Workers surveyed were told up front that the aim was to help raise the pay of delivery workers and suggested “correct” answers, according to the lawsuit

Grubhub also expressed concern about the increased difficulty in monitoring workers. Uber said, in a separate lawsuit, that the higher minimum wage would inflate food order prices, in turn hurting local restaurants.

App services like Uber have fought for years against regulations against the “gig worker” economy. Earlier this year, a court ruled that Uber and Lyft could keep treating drivers as contractors, rather than reclassifying them as salaried employees. 

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