Uber Technologies, Inc UBER Uber Eats, and DoorDash, Inc DASH stocks are trading lower Thursday. They, along with Grubhub, have prosecuted New York City on Thursday to block a new law that sets minimum wages for food-delivery workers.
Starting July 12, companies pay workers around 50 cents for every minute they spend on a trip or a minimum of $17.96 an hour for the time they spend actively on each app, equivalent to around 30 cents a minute. Both rates exclude tips.
The companies say the new per-minute trip rate could be significantly higher than the minimum wage set for other industries, leading to multiple apps paying a worker for the same hours, the Wall Street Journal reports. They find compensating workers for time spent online is flawed because delivery people are typically active on multiple apps simultaneously and free to decline orders.
The apps say the new metrics would force them to raise consumer fees in New York City to offset costs and limit the number of workers who could work for each app, hurting gig workers’ flexibility.
The companies currently pay their drivers at a rate per trip set by each app. The drivers earn tips on top of that.
New York City’s Department of Consumer and Worker Protection, which drafted the law, said the minimum pay rate would help uplift thousands of working New Yorkers and their families out of poverty who braved thunderstorms, extreme heat events, and risk their lives to deliver for New Yorkers.
DoorDash, Uber Eats, and Grubhub charged the city in 2021 for capping the commissions apps could charge restaurants. DoorDash also prosecuted regulators for forcing it to share more data with New York City restaurants.
Price Actions: UBER shares traded lower by 3.64% at $42.07 on the last check Thursday. DASH shares traded lower by 4.62% at $75.54.
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