Adams Rolls Back $24-an-Hour Minimum Pay Rate for Delivery Workers
In a reversal, City Hall is advancing a new minimum hourly rate of $19.96, nearly $4 less than previously proposed.
New York City app-based food delivery workers will be paid at least $19.96 per hour by 2025 under a new minimum-wage law, the city’s labor and consumer agency proposed Tuesday — down from the than $23.82 it sought in November.
In a second try at a rule-making review, the Department of Consumer and Worker Protection (DCWP) looks to start at $17.96 an hour beginning this year, rising to $19.96 by 2025, plus an adjustment for inflation.
The agency said the rule rewrite is needed to account for the fact that many workers deliver for more than one app at the same time, known as “multi-apping.”
But workers, advocates and elected officials, including city Comptroller Brad Lander — who as a City Council member introduced the bill to establish the pay standards — accused the city of bending to the companies’ will.
“It’s a slap in the face to all of us who break our backs toiling in the city’s streets, day after day,” Astoria worker Toño Solís, who delivers for Doordash, said in Spanish. “It’s a farce: The city already heard comments, they did the math, they heard from everybody, they published their report. We need these standards now, without further delay.”
DCWP generated the initial $23.82 figure based on an analysis detailed in a report required under the law. That figure included $1.70 an hour for worker’s compensation and $2.26 an hour for expenses, and aimed to match existing minimum pay standards for the city’s ride-hail drivers working for services such as Uber and Lyft.
“We were happy with the numbers that the city proposed [in November],” said delivery worker and Los Deliveristas Unidos leader Sergio Ajche in Spanish. “To have them change the rules at this stage, it’s a huge letdown.”
The administration of Mayor Eric Adams blew past its Feb. 15 deadline to roll out the highly anticipated pay scale, which was mandated by a 2021 local law that requires a minimum hourly wage for workers using apps such as DoorDash and Uber Eats. The turnabout announced on Tuesday kicks off another rule-making and public hearing, scheduled for April 7, nearly two years after the Council first picked up the issue.
New York’s more than 65,000 food delivery workers currently earn $11.12 an hour (including tips and after expenses), according to estimates by the city.
The agency drew sharp criticism from Lander: “Every day deferred violates the law,” he said.
“The only thing that has come out of this prolonged process is the weakening of standards at the behest of massive Silicon Valley gig companies,” he said. “DCWP should not give in to corporate bullying. The delivery workers who were so critical to our city during the pandemic deserve their due, now.”
The revised proposal also includes a new two-tier pay system that allows apps “flexibility in how to meet the minimum pay requirement,” according to a statement from DCWP, by paying workers an hourly or a per-trip rate broken down by the minute based on a newly-revised formula.
“Delivery workers, like all workers, deserve fair pay to support themselves and their families,” DCWP Commissioner Vilda Vera Mayuga said in a statement. “We are excited to establish a minimum pay rate and look forward to receiving additional public feedback on the new proposal.”
Apps that already pay workers hourly, like the New York-based Relay, must pay workers $17.96 an hour — a rate that accounts for all the time a worker is connected to the platform, including waiting for trip offers and trip time. That rate amounts to an estimated 30 cents per minute, according to an agency report of the new rules obtained by THE CITY.
Companies that only pay for trip time — from the moment the worker accepts a delivery offer to the moment it drops off the delivery — must pay at least approximately 50 cents per minute of trip time, not including tips.
The agency said in a statement that the 30 and 50-cent approximate per-minute rate are merely an estimate, and that the apps “would have to calculate exact pay in accordance with the rule.”
Virtually every major player on the market aside from Relay, from Uber to DoorDash and Grubhub, pays workers on a per-trip basis. All four of those companies are collectively responsible for 99% of app deliveries in the city, according to estimates from the city.
Uber, which heavily opposed the minimum pay rate proposal, outpaces them all. The company, which also owns Postmates, is the market leader locally, with approximately 40% of sales in the city, according to a report by McKinsey & Company cited in the DCWP’s minimum pay rate report from November.
At a Dec. 16 hearing, hundreds of workers who identified as working for the company submitted comments urging the city to change its proposal.
“The reason why I choose to deliver with Uber is because I enjoy the full flexibility to pick which days of the week, hours of the day, and parts of the city I work in,” hundreds of workers wrote in English and Spanish, from a form letter. “I don’t want to compete with workers for the best time slots and I don’t want to be locked out of apps. I urge you not to force apps to take away my freedom & flexibility.”
DoorDash, the fastest-growing platform nationally, also submitted a public comment rejecting the city’s initial proposal because of the multi-apping issue.
Sascha Owen, the company’s government relations manager for New York, wrote that the mandatory pay rate “will likely result in substantial new costs that will need to be passed along to consumers … and many NYC families will likely no longer be able to afford delivery services as a result of increased costs.”
In all, the agency received nearly 2,000 public comments about the initial proposal.
The April 7 hearing scheduled for the newly revised rule will be the third public hearing overall about the minimum pay standards.
Advocates joined workers in condemning the city’s reversal.
Fahd Ahmed, the executive director of Desis Rising Up & Moving representing South Asian communities, told THE CITY the about-face made it appear as if the city ceded “to pressure from the corporations.”
Ahmed said, “Obviously, they have the money and resources to push their point of view at the expense of workers.”
“The minimum pay is already long overdue. And what we want is the minimum pay to go into effect,” said Ligial Guallpa, executive director of the nonprofit behind Los Deliveristas Unidos. “As an organization, we’re fearful that corporate interest is being put before workers’ dignity.”
Guallpa added: “It is disrespectful to keep Deliveristas waiting in order to receive a fair pay.”
Ajche, the delivery worker, said he was “keeping the faith.”
“This is not over — just like the companies organized to oppose the original rule, we need to keep organizing to win a fair wage,” he said.
Los Deliveristas Unidos, the delivery worker advocacy group that led efforts for a minimum pay standard, scheduled a rally against the city’s reversal Tuesday afternoon near City Hall.
A heckler named Octavio López, who identified himself as a delivery worker of more than 10 years, derailed the event, shouting down leaders and casting blame on them for not securing a higher minimum pay rate casting them as “farsantes” – phonies.
“I wanted $30 an hour, too,” he said at one point, in Spanish. “You all lied to us.”
Ajche, a delivery worker and movement leader, said that the workers like López are misplacing their anger.
“Some people are frustrated because they think that everything that’s happening now is our fault, that we have somehow provoked the companies into retaliating and instigating these anti-worker efforts,” like the reduced minimum pay rate announced by Adams Tuesday, he said.
Workers have long maintained they toil punishingly long shifts for what amounts to very little pay. One worker who spoke with THE CITY last year said she earned as little as $45 in take-home pay after a 10-hour shift.
Delivery worker Willy Medina said in an interview Monday the reversal shows “a lack of respect” for him and his colleagues.
“We’ve been working on this for two years. The city already missed its deadline by nearly a month, and still the delays will continue,” Medina said. He and Solís are both members of Los Deliveristas Unidos.
‘We’re going to fight back stronger than ever,” Solís said.
This story has been updated to reflect Tuesday afternoon’s demonstration and pushback at City Hall.