New York City will compel food delivery companies like DoorDash and UberEats starting July 12 to pay delivery workers $17.96 per hour, more than double the $7.09 hourly rate the city estimates food couriers make now.
Hungry New Yorkers could see the costs of their delivery orders rise by over $5 per meal due to the government-mandated wage hike, the city admitted in a study last year.
"They are telling apps: Eliminate jobs, discourage tipping, force couriers to go faster and accept more trips—that’s how you’ll pay for this," a spokesman for UberEats told CNN in a statement.
The new rule is part of a push from labor groups to raise wages using government coercion. In 2023, 23 states and the District of Columbia increased minimum wages at the start of the year, according to the Economic Policy Institute.
The Minnesota legislature last month passed a minimum wage and benefits rule for gig workers like Uber drivers. The law was vetoed by Democratic governor Tim Walz, who said the bill "could make Minnesota one of the most expensive states in the country for ride share."
Wage hikes in subsequent years will be adjusted for inflation, the city said, and will increase to $19.96 per hour in 2025.
New York small business owners say the new rule will even affect businesses that don’t use delivery workers.
"I’m all for anybody making the best situation for themselves, but it will increase the price of labor in the kitchen because many of the people who currently work in kitchens could just as easily be riding up and down the avenues on bikes," Dave Goodside, owner of an Upper East Side restaurant, told the New York Post.
A New York City study projects "restaurants will be mostly unaffected by the minimum pay rate but may see a modest increase in profits if consumers respond to higher app fees by purchasing directly from restaurants."