Delivery Giants Uber, DoorDash And Grubhub Fail To Halt NYC's Minimum Wage Increase: Report

Uber Technologies Inc. UBER, DoorDash Inc. DASH and Just Eat Takeaway.com TKAYF owned Grubhub Inc now face a mandate to pay food delivery workers a minimum of $17.96 per hour after their efforts to overturn the New York City minimum wage were unsuccessful.

This verdict represents a notable achievement for New York in its pursuit to control widely used delivery services.

In a decision handed down by New York State Supreme Court Justice Nicholas Moyne, the city was given the go-ahead to enforce the rule, reported Bloomberg.

This means companies can either pay a straightforward hourly rate or opt for a per-delivery payment structure, approximating 50 cents per minute.

Joining hands earlier this year, the three delivery giants sought to prevent the rule's application that was originally slated for July 12.

The report further noted that this legal clash is just one in a series of challenges delivery companies have put forth in their bid to curtail New York's attempts to regulate them. Those include a challenge to a cap on commissions the apps can collect from restaurants and an attempt to strike down a requirement to share customer data.

As these apps gain traction, cities like New York have initiated regulatory measures addressing rideshares, food deliveries, and short-term rentals. 

Furthermore, the new legislation is set to introduce a second wage increment, bringing the hourly rate close to $20 by April 2025. New York's current minimum wage stands at $15.

The report quoted Uber stating, "This law will put thousands of New Yorkers out of work and force the remaining couriers to compete against each other to deliver orders faster."

The report noted that DoorDash was evaluating its legal options.

Approximately 60,000 delivery workers in New York currently earn around $11 an hour post tips and expenses, with a significant portion being migrants.

The report cited advocacy group, Worker's Justice Project, saying, "Multibillion-dollar companies cannot profit off the backs of immigrant workers while paying them pennies in New York City and get away with it. The judge's ruling is another reminder that workers will always win."

Price Action: UBER shares are trading higher by 0.54% at $46.39 in premarket on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.