Consumer Report: Delivery Drivers' Wages

A new minimum wage rule for app-based food delivery drivers in New York City that was set to start July 12 is now on hold.

A judge’s decision comes after Uber, DoorDash, GrubHub, and New York based Relay filed lawsuits against the city. Still, a larger movement to change pay for gig drivers is picking up steam across the country.

"We have to work between 12 and 14 hours a day to get at least 140 or 160 dollars,” says William Medina, one of the nearly 60,000 delivery workers in New York City.

Just days before New York’s change was scheduled to take effect, Medina was out in Manhattan, trying to educate fellow drivers and customers about the new rule.

It’s aimed at requiring companies like Uber, DoorDash, and Grubhub to pay drivers in New York City $17.96. The city estimates that currently, drivers make just about $7.09 before tips.

Advocates argue the increase will help provide financial stability for drivers – who operate as contractors.

The push for change comes amid growing criticism around how these companies compensate gig workers. The movement has already led to higher wage laws for gig workers in California, Washington state, and Seattle.

Minnesota's legislature passed a bill in May that would have set a minimum wage for ride-share drivers. The Governor, though, vetoed it after Uber threatened to halt its operations in greater Minnesota — outside of the Minneapolis-St. Paul metropolitan area.

In the New York case, DoorDash claims the city's process was "misguided" and "relied on dubious methodology,” warning the plan could add to higher prices for consumers.

Michael Reich, a labor relations professor at the University of California, Berkeley has studied wage increases for ride-share drivers. He estimates the price increases could be minimal.

“When you talk about a 6% increase in say a $20 trip, that's what, a $1.50 or something like that...let's not call it a big increase in prices,” said Reich.

Medina says his fight for gig workers is just beginning. If the wage increase clears this current hurdle, next he wants rules guaranteeing insurance for delivery workers.

The judge put New York City’s minimum wage increase on hold until at least the next hearing on July 31.

The companies have said they're interested in working with the city to figure out something that works for both sides.

DoorDash already announced a national plan to restructure how it pays delivery workers.