In 2021, New York’s City Council passed a set of laws to protect app-based delivery workers, including a bill intended to set a wage standard for some 65,000 delivery workers—the majority of whom are immigrants—following a study from the city’s Department of Consumer and Worker Protection (DCWP).

Now, more than six months after DCWP released its initial findings, the city is following through on its promise to raise wages for delivery workers on apps like DoorDash, Grubhub, and Uber Eats. The new pay scale in New York City starts at $17.96 per hour on July 12, and will increase to $19.96 per hour by April 2025. That’s a big step forward from the $7.09 per hour delivery service workers are currently paid before tips, according to DCWP’s findings.

It is a huge milestone after years of work by the Worker’s Justice Project, Los Deliveristas Unidos, and their allies to improve working conditions for a workforce that helped keep New York afloat through the pandemic. Thanks to the detailed DCWP analysis of confidential data provided by Grubhub, Uber Eats, and DoorDash, we finally have an accurate accounting of the number of workers in this industry, their wages, and expenses and risks they incur on the job. Los Deliveristas are rightly celebrating a victory.

At the same time, there is a long way to go to really get this right. After accounting for expenses that DCWP estimates at $2.82 per hour, $17.96 is just higher than New York’s minimum wage (currently $15 per hour, rising to $17 per hour by 2026). It’s a lot less than the $23.82 per hour that DCWP recommended in November. And now, DoorDash and others have sued the City of New York in an attempt to avoid paying these fairer wages.

After heavy lobbying by app companies, the new city standard will also allow companies to opt out of a requirement to pay for total hours worked, and instead companies can pay only for the time workers have an order in hand. This loophole leaves the worst actors in this industry free to continue using a predatory pay model that makes it impossible for workers to earn a decent wage unless they go out under the most dangerous conditions like heat waves, flash floods, and cold snaps.

Pay ordinance sets a new model for states and cities, but improvements are needed

The congruence of low pay, long hours, and increasingly unsafe working conditions led many delivery workers to begin organizing for better pay and working conditions in 2020. Los Deliveristas Unidos (LDU) emerged as a worker-led coalition that—in partnership with the Worker’s Justice Project—began lobbying city officials to pass legislation to make life just a bit easier for a workforce made up largely of young, working-class immigrants looking to make a living in one of the most expensive cities in the United States.

LDU experienced considerable early success and won key allies in City Hall, which passed a set of laws in 2021 aimed at increasing workers’ access to bathrooms and rest areas throughout the city and informing workers of their rights. Among this set of bills was a resolution that triggered a formal study by the DCWP into what a fair pay scale would be for app-based delivery workers.

In November 2022, DCWP released the findings of its report and proposed a minimum wage of $23.82 per hour that would have been one of the most significant victories for app-based workers in years. The other major city working to improve conditions for deliveristas is Seattle, where legislators have instituted their own wage standards, though Seattle’s is closer to a modification of the pay structure apps already employ.

If implemented, DCWP’s recommended New York standard would have been the first in the country to establish an hourly wage that includes all time spent working—not just time from pick-up to drop-off—for gig workers on apps like DoorDash, Grubhub, and Uber Eats. Changing the way workers are paid would not only result in better take-home pay, but also incentivize companies to minimize time delivery workers sit waiting for the next assignment.

While the new standard enacted by the New York City Council does have an hourly wage, it includes a glaring loophole. New York’s “alternate method” gives companies the option to keep paying workers by the order, with a premium designed to make up for not paying them hourly. In the existing model, companies pay workers a flat rate per minute workers have orders in their hands combined with another rate that pays them per mile traveled. The alternative method lets companies keep paying only for the time workers have deliveries in hand but raises the per minute rate so that it is—in theory—comparable to what they would make if they were paid a true hourly wage.

The problem here is that just three companies—DoorDash, Grubhub, and Uber Eats—employ more than 90% of delivery workers in New York. They will almost certainly opt for the alternate method, which relies on virtually the same pay structure they already employ.

Even after the city acquiesced to many of these corporations’ demands, however, DoorDash, Grubhub, and Uber Eats have filed a lawsuit against the City of New York to avoid paying workers fairly. It’s a sign that these companies recognize just how much this new pay structure could impact how they do business.

The truth is that these companies have produced billions of dollars in market value for stockholders off the backs of a workforce made up largely of immigrants and people of color who can hardly make ends meet. The predatory pricing model these app companies use forces workers to absorb not just economic risk but also risk to life and limb. Rushing to squeeze out a living from desperately low wages has made delivery work in New York one of the most dangerous jobs in the nation. In all, 33 delivery workers have died on the job in New York since 2020, including 16 who died in 2021 alone. The DCWP calculated the number of on-the-job fatalities at 19 per 100,000 delivery workers. By comparison, construction workers in New York—generally considered the most dangerous job in the United States—had an on-the-job fatality rate of 13 per 100,000 workers.

A new standard for a national problem

The efforts of LDU and their partners have helped pave the way for a new approach to building worker power in the so-called gig economy. In the platform-based labor market, companies—specifically Uber and Lyft—have consistently sought to deny employee status to drivers or other app-based workers, instead designating them as independent contractors. Reclassification of app-based workers as employees, as EPI has noted in numerous reports on this issue, would provide many workers with basic benefits and protections from which they have been excluded, including the right to organize a union, benefits such as unemployment insurance, and more. LDU’s strategy of starting with a wage standard sidesteps the larger question of employee status for the moment while winning a big and immediate wage improvement.

So far, Los Deliveristas Unidos and the Worker’s Justice Project have focused on building social and political power in New York and using legislative policies to reshape the state of platform-based delivery work in the city. Back in 2022, when the city held a public hearing on a suitable wage standard for delivery workers (to which we at IRI contributed oral and written testimony), allies were instructed to focus mainly on setting a strong minimum wage through the law, rather than employee status.

LDU’s achievements are especially valuable models for delivery drivers to consider in the 44 states where Uber and Lyft have succeeded in passing state laws preempting local pay standards for rideshare drivers, but where local standards for delivery workers are still a fully legal option.

Overcoming company threats and scare tactics

DoorDash, Uber Eats, and Grubhub are powerful economic and political players, and when they are challenged, they seem to trot out the same tired arguments and divisive strategies. In New York, company tactics to resist passage of the new pay standard included messages directly to workers with misinformation about impacts of the DCWP-recommended pay scale.

The main company claim in these messages was a disingenuous argument that a decent wage standard would force companies to start locking out delivery workers in certain areas—like Manhattan—and at certain hours when order volumes are at their peak. While an hourly wage does place some natural limits on the number of employees a company can retain at any time, these apps already lock out employees at specific times and in certain regions of the city. This is neither a new practice nor the result of better pay for workers.

These tactics echoed Uber’s and Lyft’s actions when states like New York and California began legislating on behalf of rideshare workers. The companies used in-app messaging to reach out to both workers and consumers claiming that workers’ hours would be cut significantly and that the price of Uber or Lyft rides would skyrocket. Some three years later, we have seen that neither of these occurred. As Terri Gerstein—EPI senior fellow and director of the Center for Labor and Just Economy at Harvard Law—has pointed out, higher wages for workers usually lead to more productivity, less turnover, and better overall outcomes for both workers and their employers.

The overall lesson here is two-fold. First, when workers start to organize and take power for themselves, there is a high chance of success. This is especially true at the local level: In domains where local worker rights have not been preempted by abusive state interference, workers can assert direct influence with municipal lawmakers through grassroots organizing strategies. Second, organizers, advocates, and think tanks must work together to develop a counter-narrative strategy to effectively discredit outlandish claims from corporations that paying workers fairly will cause undue harm to consumers and employers.

Anthony Capote is a senior policy analyst at The Immigration Research Initiative.

About The Immigration Research Initiative

The Immigration Research Initiative is a nonprofit, nonpartisan think tank on immigrant integration, looking at issues of economic, social, and cultural inclusion of immigrants in the United States. IRI is attentive to how immigrants fare in the United States and to how the receiving communities fare as they change, with particular attention to the implications for race, gender, and income equity.

IRI is a member of EPI’s Economic Analysis and Research Network (EARN), a network of state and local organizations improving workers’ lives through research and advocacy.