Rivals Uber Technologies Inc., DoorDash Inc. and Grubhub Inc. joined forces in suing New York City to block a new rule on minimum compensation for app-based food delivery worker, arguing it will hurt couriers and customers alike.
In a pair of lawsuits filed Thursday in New York state court, the three asked for a temporary restraining order and a preliminary injunction against the regulation until the court can rule on the merits of their arguments. The rule is set to go into effect on July 12.
Uber said in its complaint that the rule would force the apps to shrink their delivery radius and “cause immediate and irreparable harm to Uber in the form of lost goodwill with couriers and customers and in the form of nonrecoverable costs.”
New York has been at the center of other litigation by the companies. In 2021 Uber, DoorDash and Grubhub sued the city over a cap it placed on the commission they could collect from restaurants on the platforms. Last year the three came together again to fight a mandate that they share customer data with restaurants. The legal actions are ongoing.
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To meet the city’s new requirements, companies can either pay couriers a flat hourly rate of $17.96 or pay per delivery at about 50 cents a minute, not including tips. The food delivery companies say that structure isn’t suitable for gig-based work and could end up reducing a courier’s earning power while raising fees for customers.
Uber said in a statement that the rule is based on the “false assumption that restaurants lose money on all deliveries.”
The city said it was “disappointed” by the legal action.
“These workers brave thunderstorms, extreme heat events and risk their lives to deliver for New Yorkers — and we remain committed to delivering for them,” Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga said in a statement. “The minimum pay rate will help uplift thousands of working New Yorkers and their families out of poverty.”
DoorDash said in a statement that it wouldn’t accept “the harmful impacts of this earnings standard on New York City customers, merchants and the delivery workers it was intended to support.” Grubhub said it couldn’t “support a solution that has such unintended implications for those who rely on food delivery.”
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The cases are Uber Technologies Inc. v. New York City Department of Consumer and Worker Protection, 155943/2023, and DoorDash Inc. and Grubhub Inc. v. New York City Department of Consumer and Worker Protection, 155947/2023, New York State Supreme Court, New York County (Manhattan).
--With assistance from Laura Nahmias.
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