App services warn that a proposed wage increase for New York City workers could mean higher delivery costs.
William Medina, a delivery worker in Queens, waits for orders to trickle in from DoorDash and Grubhub. Thirty minutes can go by without a single order. Sometimes an hour.
He gets paid by the order, so no order, no money.
“I’m always ready,” said Mr. Medina, 38, an immigrant from Colombia, who makes an average of $150 to $200, mostly in tips, for up to 12 hours of work.
Mr. Medina is one of more than 60,000 app-based food delivery workers who race across the city to serve hungry New Yorkers. Many put in long hours, while braving nasty storms, flooding, speeding drivers and thieves.
The workers banded together in the summer of 2020 as Los Deliveristas Unidos. Mr. Medina, who is an outspoken member, and his colleagues are demanding better pay and working conditions, arguing that they are part of a booming industry. Since delivery workers are independent contractors, they are not covered by minimum wage laws and basic employee protections such as workers’ compensation insurance.
Now, as a result of their efforts, Uber Eats, Grubhub, DoorDash and other app services may soon have to pay workers like Mr. Medina significantly more, as the city moves to regulate pay practices in the largest food delivery market in the country.
Under a proposal by the city’s Department of Consumer and Worker Protection, the app services would be required to pay an average hourly rate of at least $23.82, not including tips, to delivery workers by 2025. The agency, which will hold a Dec. 16 hearing on the proposal, is expected to implement it early next year.
The minimum hourly rate would apply to a worker’s total “trip time” each week, which would be calculated from the moment a worker accepts an order to when the delivery is completed. It would include the time it takes to go to a restaurant and wait for the order, as well as any traffic delays. The rate would be phased in over two years, starting at $17.87 per hour next year.
The app services would also have to pay the minimum hourly rate on the total amount of “on-call time” that all the delivery workers collectively spend waiting for orders each week. However, the proposal currently leaves it up to each company to decide exactly how these payments would be made.
The city’s proposal has drawn criticism from the app companies, who warn that it would increase their labor and delivery costs, and could result in higher prices for customers and fewer orders for restaurants. They also say that it would undermine a delivery system that currently allows workers to plan flexible schedules.
Josh Gold, a spokesman for Uber Eats, said the service would be forced to “aggressively manage supply and demand” to reduce waiting times for workers. He said that could mean limiting the number of people who could sign up for peak hours in popular neighborhoods.
“It’s going to create a different set of problems,” Mr. Gold said. “These workers are going to be pitted against each other to get the best time and location.”
Essential work, ‘poverty wages’
New York’s pay proposal is part of a growing movement across the nation to address the plight of app-based workers, including Uber drivers and grocery delivery people.
In May, the Seattle City Council passed a “Pay Up” bill that requires app companies to pay per-minute and per-mile rates to delivery drivers, starting in 2023. The city previously mandated temporary pandemic “premium pay” of at least $2.50 per delivery.
“At the end of the day, it’s about improving workers’ lives and making sure their day-to-day is a little bit more tolerable,” said Brian Chen, a senior staff lawyer for the National Employment Law Project, a nonprofit advocacy and research group.
In New York, the City Council approved a minimum pay standard for delivery workers last year as part of a groundbreaking package of bills that included a measure to allow workers to use bathrooms in restaurants and required app services to disclose their gratuity policies, while preventing them from charging workers fees to get their pay.
It was the second time the Council had sided with the city’s growing numbers of app-based gig workers. In 2018, it passed a similar bill to establish a minimum pay standard for ride-hail drivers. Since then, the city’s Taxi & Limousine Commission has significantly raised wages for Uber and Lyft drivers.
Brad Lander, the city comptroller, who as a councilman was the lead sponsor of both minimum pay bills, said he was especially moved by the organizing of the food delivery workers. At the height of the pandemic, he added, delivery workers would ride by his block in Park Slope, Brooklyn, while he and his neighbors clapped and banged pots for essential workers. “Here they are making poverty wages,” he said, “which is totally unacceptable.”
Currently, app-based food delivery workers earn an average of $14.18 an hour, split between tips and payments from the apps, according to a city report. But after accounting for their substantial work expenses, those earnings can drop to $11.12 per hour — or as little as $4.03 an hour without tips.
Some workers have eked out more. Joshua Wood, another Deliveristas member, started working for Uber Eats during college breaks and returned to the gig when he could not find a full-time job. Soon he was spending between 20 and 30 hours a week on his bike, earning between $20 and $25 an hour as he got faster and more efficient.
“Most people my age are working a service job,” said Mr. Wood, now 25. “This happens to be the one I can tolerate and I’m physically able to do it.”
At the height of the pandemic, Mr. Wood made up to $40 an hour as orders poured in, customers tipped generously and Uber Eats offered incentives to get more workers. But by this year, the orders had dried up. “Most of us were making less than $15 an hour,” he said. “On a bad day, you sit on the curb and you get one job and you make $5.”
In March, Mr. Wood moved to a courier service, where he now makes around $30 an hour delivering packages and office supplies.
The city report on delivery workers also found that they have high rates of injury on the job and cited the deaths of 33 restaurant delivery workers since 2020, though not all of them worked for the apps. Many workers have also been attacked or robbed, or have had their expensive e-bikes stolen.
The proposed $23.82 hourly rate includes $2.26 an hour to cover workers’ expenses and another $1.70 an hour because they do not have workers’ compensation insurance. The base rate of $19.86 per hour is intended to match the minimum pay rate for Uber and Lyft drivers.
Los Deliveristas Unidos has called for several changes to the city’s proposal, including raising the minimum rate by $5, to $28.82 per hour, to cover more expenses.
Mr. Medina, the Queens delivery worker, rides a used moped that he bought for $3,800 this year. He spends about $300 every month on gas, liability insurance, maintenance and repairs, and GPS tracking, in case it gets stolen.
“For me, $5 more is good, but it’s not enough,” he said.
Why better pay might lead to less flexibility
DoorDash said that the city’s pay increase proposal does not account for the flexibility that delivery workers have, or that they can choose which orders to accept or reject. “Failing to address this could significantly increase the costs of delivery, reducing orders for local businesses and harming the very delivery workers it intends to support,” according to its statement.
But many delivery workers said that they already faced restrictions on their hours, and that they get blocked from working at all if they are late with deliveries, decline orders or receive low customer ratings.
The city’s proposal is intended to force the companies to better manage their workers’ time on the apps, said James Parrott, the director of economic and fiscal policy at the Center for New York City Affairs at the New School, who advised the city on the plan.
“It’s a fiction that the workers really have flexibility,” Mr. Parrott said. “Sure, they can go on at 2 a.m. in the morning, but they’re not going to get paid so why would they do that?”
Mr. Parrott added that the money the app companies would have to pay for waiting time could be used to incentivize workers to go to underserved areas or take orders during off-peak hours.
The New York City Hospitality Alliance, which represents restaurants, has not waded into the debate. Andrew Rigie, the executive director, said the restaurant industry could accommodate the needs of both the delivery workers and the app services. “Restaurants have a strong interest in seeing a compromise,” he said.
‘This is about their dignity’
Many workers see the proposed hourly rate as an important step in recognizing that food delivery has evolved from a part-time gig to a full-time profession for some people, including many immigrants.
Hildalyn Colón Hernández, the director of policy for Los Deliveristas Unidos, said food delivery workers should be compensated for their time just like other essential workers. “Firefighters don’t just get paid when they have a fire,” she said. “They get paid for the time they are waiting in the firehouse for that call. We’re asking for the same thing.”
She recounted how one man, a Mexican immigrant, who had made more than 4,000 deliveries for DoorDash, saw his orders plummet last summer, leaving him with just $20 at the end of most days. He had to cut back on meals and borrow money from friends to pay his rent.
“We’re fighting for the bare minimum,” she said. “This is about their dignity.”