App companies currently pay drivers per delivery rather than per hour, although the New York City Department of Consumer and Worker Protection calculates that it equates to average hourly pay of $7.09 before tips. The agency, which is named as a defendant in the lawsuits, announced the new minimum wage rule last month. It would increase pay for delivery workers to nearly $20 an hour by 2025.
DoorDash and Grubhub argue in a joint lawsuit that the rule is based on “inherently biased and unreliable survey data” and would hurt delivery drivers rather than help them.
If the rule goes through, the companies say, the increased costs would be passed on to consumers, which would result in fewer customers for delivery workers to deliver to and “injure its goodwill within the industry,” according to court filings.
In a separate lawsuit, Uber said the increased minimum wage would hurt local restaurants because the higher costs could dissuade customers from ordering.
Makers of delivery apps have long fought against regulation of their businesses. In Thursday’s lawsuit, DoorDash and Grubhub argued that the rule is based on faulty data from a delivery worker survey with flawed methodology. Respondents were told up front that the survey was intended to help raise the pay of delivery workers, and “correct” answers were suggested, the lawsuit claims.
In a statement sent to The Washington Post, Ligia Guallpa, executive director of the Worker’s Justice Project, a labor advocacy group that helped organize the survey, called the lawsuits “unconscionable.”
“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,” Guallpa said.
A Grubhub spokesperson told The Post that the company has engaged for months with the city on ways to support its drivers, including alternative pay methods. One concern raised by app makers is that the new rule would require them to monitor the time its riders spend on the app but not on rides themselves.
“Grubhub commends the city’s attention to this issue, but we cannot support a solution that has such unintended implications for those who rely on food delivery,” the company said in a statement.
Uber and the New York City Department of Consumer and Worker Protection did not immediately return messages seeking comment.