New York City’s food delivery workers now make a minimum wage of $19.56 an hour, but workers are complaining that the app services they work for are diminishing their wage gains by locking them out of access to the apps, effectively cutting their salaries.
“We want justice! No more lockouts!” members of Justice for App Workers chanted during a March 27 protest rally in front of the New York City Hall.
Justice for App Workers claims that NYC’s app-based restaurant delivery workers––known as deliveristas––are being punished by the apps they work for. The national coalition group represents more than 130,000 rideshare drivers and delivery workers. They are organizing deliveristas to help them push for “living wages, a safe working environment, an end to unfair deactivation, quality healthcare benefits, reliable bathroom access, and the right to form a union.”
As a result of a 2021 law, the more than 60,000 deliveristas who sign on with app-based delivery companies like UberEats, GrubHub, and DoorDash received their pay increase on April 1, 2024.
The wage increase was the end result of a three-year campaign led by the Los Deliveristas Unidos (LDU) collective, who joined with the Worker’s Justice Project to fight for the basic labor rights of delivery workers.
The city government agreed that delivery workers needed a pay increase after conducting its own study, mandated by City Council passage of Local Law 115, which required the Department of Consumer and Worker Protection (DCWP) to look at the average pay of app-based delivery workers and their working conditions.
However, Justice for App Workers is claiming that because there were no lockout protections attached to the mandated wage increase, some workers are losing income.
“When the original rule was announced, our coalition was worried it would lead to lockouts, and we have been calling for a solution to this issue for months. Unfortunately, we were right, and the lockouts have already started,” the coalition stated in a press release. “UberEats and DoorDash have also started using dirty tricks to hurt workers. They recently updated their systems to prevent customers from tipping workers during checkout, which has the potential to decrease our daily pay. As delivery workers, we don’t just live paycheck-to-paycheck. We live DAY TO DAY. And if we’re locked out of our app without warning, or not given the tips that we deserve, we can’t pay our bills. That’s why it is extremely important that we get a raise WITHOUT lockouts.”
61,000 deliveristas a week
A 2021 law called for DCWP to investigate the employment conditions among the city’s app-based restaurant delivery workers and devise a minimum pay rate for their services.
In their published report, DCWP estimated that in 2022, apps like Doordash, Uber Eats, Postmates, and GrubHub employed on average a minimum of 61,000 deliveristas a week. More than half of the workers were aged between 18 and 34, and 91% of deliveristas are categorized as non-white and/or Hispanic.
The agency wrote that, “The three largest apps (Uber Eats, DoorDash, Grubhub) are all global, publicly traded companies. According to a report by McKinsey & Company, Uber Eats, including Postmates Inc. (Postmates), which it acquired in 2020, is the market leader locally, with approximately 40% of marketplace sales in NYC. Grubhub, which merged with Seamless in 2013 and was purchased by the Netherlands-based Just Eat in 2021, has about 35%. DoorDash, which is the largest and fastest-growing nationally, holds only about a 25% share in NYC. The Department estimates that the deliveries that Uber Eats, DoorDash, and Grubhub perform in NYC generate about 4.8% of their global delivery revenue and 2.5% of their revenue across all lines of business.
“Despite large losses, which are not uncommon for growing technology companies, the three apps had a combined $75 billion market capitalization as of October 2, 2022. Relay, the fourth largest delivery app, is an NYC-based startup, and the only one operating in NYC that does not have a consumer-facing mobile application or website. Instead of marketing to consumers, Relay serves restaurants as a lower-cost option to fulfill their deliveries.
“Delivery apps,” the DCWP noted, “generate revenue by charging fees to restaurants and consumers (except for Relay, which charges only restaurants). Delivery worker pay is the main cost they incur.”
Justice for App Workers also claim that app companies have changed the ability for customers to tip deliveristas, making a tip show up as a request only after orders are delivered. More customers are declining or failing to tip.
The coalition is calling for the City Council to update the new app wage law and not allow app companies to lock workers out of their shifts.