A New York state judge has issued a stay on a New York City rule that would require food delivery companies to pay drivers an almost $18 per hour minimum wage.
New York State Supreme Court Judge Nicholas Moyne issued a preliminary injunction on Friday to pause the rule from going into effect next week after lawsuits were filed jointly by DoorDash and Grubhub and separately by Uber on Thursday.
Moyne set a hearing for July 31 to hear arguments on whether the injunction should stand while the legal challenges play out.
The city’s Department of Consumer and Worker Protection set the rule requiring food delivery workers for apps like Uber Eats and DoorDash to receive at least $17.96 per hour, a significant increase from the average $7.09 per hour that they currently make. Officials said this type of policy is a first for any place in the United States.
The minimum wage would be set to rise to $18.96 hourly in April 2024 and $19.96 hourly in April 2025.
Mayor Eric Adams (D) declared that the rule was providing the support that delivery drivers deserve, but the food delivery companies have criticized the plan.
DoorDash and Grubhub argued that the rule would have “drastic” and “immediate” consequences for all parties involved, including a more than $5 increase for New York City consumers per order. They argued that it would reduce demand for their services and cause reputational and financial harm.
Uber said in its complaint that it estimates that the cost of orders would increase by almost $6 before inflation and orders would decline by almost 20 percent. It argued that the department made its rule based on “flawed” data coming from “biased” surveys and “unrealistic expectations.”
Uber said having the policy done correctly is more important than having it be implemented as quickly as the rule would have it.