Perhaps more than any other US city, New York relies on a growing army of delivery workers, who have weathered relentless waves of Covid, extreme weather and toxic air as remote work reshaped the economy. Now, his salary is increasing.
Starting July 12, app-based delivery workers in New York City must be paid at least $17.96 an hour, not including tips — the first such minimum pay-rate in the country for an industry that has exploded in popularity during the pandemic. . The increases, announced over the weekend by Mayor Eric Adams, go into effect nearly two years after the city council passed a set of bills designed to improve conditions for workers.
Critics say the rule doesn’t do enough to compensate employees who must bear a range of expenses as independent contractors, including injuries sustained on the job. And industry groups argue that the additional cost could reduce opportunities for some workers and pass the costs on to consumers and restaurants, who already pay high fees to use the app.
The city’s more than 60,000 delivery workers who courier takeout, groceries and other goods are paid an average of $11 after factoring in tips and expenses, less than New York’s $15 minimum wage, according to an analysis by the city Paid per hour. They also cover their own health insurance, business expenses, and additional taxes.
The new law, which was first proposed in 2021, would eventually raise the minimum wage for workers to at least $19.96 an hour in 2025, or based on inflation.
“This is huge and historic for an entire industry that doesn’t have protections,” said Ligia Gualpa, executive director of the Workers’ Justice Project, a labor advocacy group that pushed the legislation. “It will have a huge economic impact on workers and their families.”
Waiting for a job outside a Chick-fil-A in midtown Manhattan on Monday afternoon, Uber Eats driver Daron Harris, 34, of Far Rockaway, Queens, was thrilled about an upcoming pay raise.
“I feel like it’s very well deserved, because some days are good and others are really bad,” he said, adding that he only gets $2.50 to $3.50 per delivery, which includes tips. are not.
Mr. Harris, who makes deliveries for about 35 hours a week and also works as a security guard, said he earns about $150 on a “good day” through Uber Eats, of which $23 goes to buy an electric bike. Will have to spend to rent.
“With this new salary, you are basically guaranteed to earn a decent amount every day,” he said.
But critics say the actual benefit to delivery workers may be less than advertised. City Comptroller Brad Lander, who first sponsored the bill as a city council member in 2021, said the city had weakened the intent of the legislation due to lobbying pressure after months of delays.
The actual increased pay will be less than $13 an hour, not closer to $20 an hour, as the city is suggesting, Mr. Lander said, partly because the rule includes a so-called multi-app deduction that assumes that How can workers be logged in? in more than one app at a time.
Mr. Lander also criticized the city’s decision to cap wage increases until 2025, when employees are already making less than the minimum wage.
The law allows delivery companies to meet the new pay requirements this year through two different models: either by paying a flat hourly rate, which is not common in the industry, or by paying around 50 cents per delivery. Paying per minute, not including tips.
A spokeswoman for the mayor’s office said the rate increase would result in “significantly higher” wages for workers, and that Mr Lander’s wage calculations were incorrect.
The multi-app adjustment is appropriate, the spokeswoman said, based on a study of how workers use the apps, and the Department of Consumer and Employee Protection will review and possibly revise the rule next year. He said the city is staggering the pay increases over a two-year period to give delivery app companies time to adjust to the new rates.
Industry groups protested the legislation. Kristin Sharp, chief executive of Flex, the trade association that represents delivery apps including DoorDash, Uber Eats and Instacart, said the additional cost to companies could result in higher fees for consumers, and a reduction or possible elimination of tips for workers. Could
He added that some companies may limit access to the app to some low-frequency employees, depending on the payment model the companies follow.
But similar bleak predictions did not come true when the rental vehicle industry, a close analog to gig workers, was forced to raise wages in New York in 2019, said James Parrott, director of economic and fiscal policy at the Center for New Was. York City Affairs at the New School.
A 2020 study on the effects of that wage increase found that driver wages increased by 9 percent and passenger fares increased by about 5.9 percent, in line with fare increases seen in Chicago, where minimum wage standards have not been established. Was. The study found that customer wait times also declined.
Dr. Parrott, who has consulted with the city on delivery worker pay, said he did not expect the wage increase to fundamentally change the food-delivery landscape in New York, and predicted that demand would continue to grow.
The city has more than doubled the number of delivery workers before the pandemic, he said, from about 25,000 to 30,000 workers in 2019 to more than 60,000 today.
And delivery companies have significant margin to help offset wage increases, he said. Last year, workers earned about $4.32 per delivery, not including tips, while delivery companies made an average gross profit of $4.19, according to a city report.
“It should not be tolerated that businesses can survive only if they can exploit their employees,” he added. “If it gets us away from a worker-exploitative business model, then it seems like a fair trade.”
Erin Nolan contributed reporting.