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Business News/ Companies / News/  DoorDash, Uber file lawsuits against New York City's minimum wage law
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DoorDash, Uber file lawsuits against New York City's minimum wage law

The new law will require companies to pay delivery workers $17.96 an hour, which will rise to nearly $20 in April 2025. Companies can decide whether to pay workers hourly or per delivery, which would be based on the hours workers are logged into the app

Uber and DoorDash in May both raised their annual earnings forecasts after beating quarterly revenue expectations, stemming from an increase in orders for food, groceries and convenience products. (REUTERS)Premium
Uber and DoorDash in May both raised their annual earnings forecasts after beating quarterly revenue expectations, stemming from an increase in orders for food, groceries and convenience products. (REUTERS)

Seeking to strike down New York City's novel law setting a minimum wage for delivery workers, Uber Technologies, DoorDash Inc and other app-based food delivery companies have filed lawsuits on Thursday.

The law will come into effect from July 12.

The new law will require companies to pay delivery workers $17.96 an hour, which will rise to nearly $20 in April 2025. Companies can decide whether to pay workers hourly or per delivery, which would be based on the hours workers are logged into the app.

The companies in a separate complaints in New York state court claimed that the law is based on a misunderstanding of how the food delivery industry works. 

Grubhub Inc joined DoorDash in its lawsuit.

Uber told a New York state court on Thursday that its food delivery business Uber Eats was joining competing apps DoorDash and Grubhub in an effort to halt the rule by the city’s Department of Consumer and Worker Protection. Uber is asking the court for a temporary restraining order and a preliminary injunction against the regulation.

“If allowed to take effect, it will cause immediate and irreparable harm to Uber in the form of lost goodwill with couriers and customers and in the form of nonrecoverable costs," Uber said in the filing.

Food delivery apps would need to increase the number of trips completed per hour to absorb the new labor costs, forcing them to shrink service areas and harming consumers and restaurants, the companies said.

The lawsuits also claim the law is based on the unsupported assumption that restaurants make little profit from app-based orders, and that it imposes burdensome recordkeeping requirements.

"This fatally flawed and subjective rulemaking process unsurprisingly worsened these already problematic policies," DoorDash said in a statement announcing its lawsuit.

Uber and DoorDash in May both raised their annual earnings forecasts after beating quarterly revenue expectations, stemming from an increase in orders for food, groceries and convenience products.

(With inputs from agencies)

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Published: 07 Jul 2023, 02:31 AM IST
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