The Journal. - NYC’s Food Delivery Workers Fight for a Minimum Wage

Episode Date: October 5, 2023

A legal battle is unfolding in New York City over a law that sets a roughly $18 minimum wage for food delivery workers. Four major app-based delivery companies — DoorDash, Grubhub, Relay and Uber Eats — have sued to block the law. WSJ’s Erin Ailworth unpacks the legal arguments, and a food delivery worker explains what’s at stake for him. Further Reading: -Judge Allows App-Based Delivery Workers in NYC to Make $18 an Hour  -DoorDash, Uber Eats and Grubhub Sue New York City Over Minimum-Wage Law  Further Listening: -The Real Cost of 15 Minute Grocery Delivery  -Can Food Delivery Make Money?  Learn more about your ad choices. Visit megaphone.fm/adchoices

William Medina The App William Medina Hello. How are you? Good, thank you. Earlier this week, we met up with William Medina. William is 39 years old, from Colombia.

He's a food delivery worker. And he's gigged for all the major delivery apps in New York City. DoorDash, GrubHub, Relay, and Uber Eats. Here's the app. We're going to connect. We hit this button to connect. There we go. Now we're connected.

On most days, William is out on the streets of New York, waiting for his phone to ping, and hoping an order comes through that's worth his while. Let's accept this delivery. The pay's not great, but it's nearby, yeah? It's $2. So let's hit accept. Williams, one of roughly 65,000 delivery workers who could benefit from a new law in New York City. It would set a minimum wage of about $18 an hour for app-based delivery workers. City officials say the law is the first of its kind. But the food delivery app companies are fighting it, setting up a legal battle that could reshape the industry.

are fighting it, setting up a legal battle that could reshape the industry. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, October 5th. Coming up on the show, the food delivery workers of New York City take on the app companies. Perfect for all you forward thinkers and planning gurus. Reserve your Uber ride up to 90 days in advance. Uber Reserve. See Uber app for details. Our colleague Erin Aylworth covers New York City for The Journal. She says that apps have totally changed the way food gets delivered. And the shift has raised big questions for the industry.

The companies are trying to figure out, like, how do we have a viable business model where we, you know, make a profit, right? And how do we treat our workers right? These were the same kinds of questions that city lawmakers in New York were asking last year. They basically did a study, right, that said, let's look at this work environment, if you will, and let's look at who makes up that environment, what kind of pay they get, what modes of transportation they're using to make these deliveries.

And let's analyze that whole sort of ecosystem and then decide, do we think what they're already making via what these apps pay, are they making a fair wage? To figure that out, the city surveyed delivery workers like William Medina, who you heard from earlier. He's part of a group of delivery workers who've been advocating for higher pay. A couple days ago, our producer Alan Rodriguez-Espinosa hopped on the back of William's motorbike and got to tag along on several deliveries.

They met up on a Tuesday. William said it was a slow night. William reviews each delivery offer and does the math. He looks at the pay and the time it would take to get to his destination. Look, for example, here's an offer. I'm not going to take this one. It's two deliveries and it pays $6.55. So that's too low. It's 3.9 miles. So if I take that order, it goes up to 91st Street and 24th Avenue. Picking up two orders and taking them all the way there, that'll take more than one hour.

William and other workers are paid a base rate per trip. That rate is set by each app. Workers earn tips on top of that. William says he works six to seven days a week, sometimes for as long as 12 hours a day. But to get paid at all, he has to get an order. And he says a big chunk of his time, about half of it, is spent waiting for orders to come in.

The time you spend on the app, it's split into time making deliveries and time waiting to receive an order. The time waiting, you don't get compensated, no minimum pay. We call that dead time. So right now, I'm getting orders that pay too low. So as long as the app isn't ringing, I'm not making any money at all. making any money at all. After more than half an hour of dead time.

Tell me what just happened and what we're waiting for. Okay, we've just received an order from a restaurant. Uber says it'll pay me $2 for this order. We're going to drive, I think, two or three blocks. Right now we're going to wait for the food, see how long it takes for them to make it. Once we have it, we'll head to the customer's house and give them the food. William picked up the food from a corner burger joint. He stuffed the food into his delivery bag.

And he drove a few blocks to drop off the first order of the night. For that trip, Uber paid him $2. He didn't get a tip. App-based delivery workers like William are not full-time employees. They're independent contractors, gig workers. One downside of that is that William is on the hook for his own expenses. Like the bike he uses to make deliveries. It's a 2011 Yamaha moped. It's black. And William says it cost him $3,500. His delivery bag cost him $60. And then on top of that, he spent a bunch

of money on modifications to make his job easier. He has a phone holder that lets him look at a map and monitor his apps while he drives. That was $35. He also got a GPS tracker in case his bike gets stolen. That was $60, plus a $21 monthly service fee. In 2022, I think it was in January, in the winter, I was the victim of a theft. Four young men jumped me here in Long Island City. They took my bike.

There's a lot of other workers here, so we have radio, we have GPS. And thankfully, my co-workers and I were able to communicate and get me my bike back. But the day they stole my bike, they threatened me with a knife. They pulled a weapon on me and insulted me. For a while, I was very afraid and I didn't want to work. I didn't want to make deliveries or ride my bike anymore. Do you feel that what you're making right now is fair for the work that you do?

No. No, no,'t think it's fair. Because, well, in my case, I have to pay rent. I think all of us, we pay rent. We all need money to eat, to pay bills. I think for me, what I make for my work and my deliveries, I don't make enough money for anything extra. New York City officials looked at what delivery workers like William were making and what they spent on work-related equipment. The city found that what these workers wound up taking home after expenses was $11 an hour on average.

And that was with tips. Without tips, it was closer to $4 an hour on average. And that was with tips. Without tips, it was closer to $4 an hour. Those findings led to the new law that was passed in June. The app companies didn't like it. That's after the break. Discover more value than ever at Loblaws. Like price drop. Hear that?

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Visit amex.ca slash yamx. Benefits vary by card. Terms apply. So let's back up a little bit. New York City passes this law to boost pay for delivery workers. How does the law work? So there are two ways that the pay rate works, and the app companies get to decide what they think is the mode they want to use. That's our colleague Erin again. You can either pay $17.96 an hour, or you can pay $0.50 for every minute that you are active. And they have issues with both of those. In New York City, four app companies dominate the food delivery market.

DoorDash, Grubhub, Uber Eats, and New York-based Relay. Soon after city lawmakers passed the minimum wage law in June, those same four companies pushed back. And they took the city to court. So the delivery app companies came out pretty quickly and filed suits saying, hey, listen, we're all for, you know, fair and minimum wage. But we don't think that the way this has been designed works. And, you know, one of the things that they argue is that under the pay rate model, where you're paying for

the active time on the app, right, the active delivery time, they're saying, hey, some of those delivery workers are on multiple apps at once. So does that mean that we're going to be like DoorDash and Grubhub are going to be paying the same delivery worker at the same time? And is that fair? By raising wages, essentially, what are they saying the effects might be? They're basically saying that it's going to be a loss of flexibility and it's going to like that they're going to have to pass on the costs to customers, right? So it's going to be you're paying more for the service and they're also going to have to put restrictions on when workers can work, you know, and how they access the apps.

The app companies said that the city used flawed surveys and that it should have included grocery deliveries in its study. The companies also said that the delivery workers' minimum wage might end up higher than what's set for other industries. The minimum wage rules were supposed to take effect in July. But when the company sued, they requested a preliminary injunction, and a judge put a hold on the law change. Things were at a standstill. Then, last week, the judge lifted the hold while he continues to consider their lawsuits. The judge said, hey, Uber, Grubhub,

and DoorDash, I don't think you actually rate a preliminary injunction so the city can go ahead and institute these new wages for these delivery workers. And how big of a deal is that for delivery workers? It's a pretty big deal. I mean, they were celebrating this as a win. Now, it's a significant step forward. This is not the final decision in the case, though. The judge did grant the injunction to Relay, which he said had demonstrated that it had a different business model than the other apps. DoorDash, Grubhub, and Uber Eats have signaled that they plan to keep fighting the law. The companies have indicated that they are going to appeal, so those appeals will be made,

and then we will wait for a judge to decide what to do about those appeals. There is probably going to be a pause while that appeal is heard. God bless the court system. That's right. there is probably going to be a pause while that appeal is heard. God bless the court system. That's right. It's a lot of small legal footsteps until we get to a big decision.

Do you think this kind of law can be replicated in other cities? Or is this something that is unique to New York City? Other cities are likely watching this, right? And if this does go through and is implemented in New York, I would imagine that there will be some sort of repercussion or ripple effect because, you know, the companies will be figuring out how to The companies will be figuring out how to abide by whatever it is that is put in place. And does that mean that they're going to have different rules for different states? I don't know yet, but I think everybody is watching. What is your biggest takeaway from your reporting on this issue?

Personally, I need to tip delivery workers more. It's a tough job. I had no idea what it was like to really do these jobs. I only knew it from the customer perspective, right, of, yes, my pizza got here when they said it would or it didn't. Right. And now I like, honestly, I'm like, as long as I get a meal, I'm good. I mean, I would like it to be, you know, to be warm or cold as the meal dictates. But it's a tough job.

Our producer, Alan, tagged along with William for one more delivery the other night. It was from a liquor store to an apartment in Queens. It was an $8 order, $5 base pay from Uber Eats, and a $3 tip. So we've been connected to the Uber Eats app for around an hour and a half, and you've made about $10 in tips. $10 in total. How do you feel about that? Very frustrated.

Do you hope that the new minimum wage law is going to make a difference? A huge difference. Absolutely. That's all for today, Thursday, October 5th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting from Pritika Rana. Thanks for listening. See you tomorrow.