Report Indicates NYC’s Minimum Wage Hike Results in Reduced Hours and Tips for Food Delivery Workers
According to a report, food delivery workers are experiencing a decrease in both their working hours and tips due to the efforts of apps like UberEats to balance out the costs resulting from the recent increase in New York City’s minimum wage.
Delivery drivers for DoorDash, Grubhub, and UberEats have experienced an increase in their overall take-home pay since the new minimum wage of $17.96 per hour came into effect on December 4, according to Bloomberg.
According to pay stubs reviewed by the publication, drivers’ tips, which used to make up as much as half of their wages, now range from 5% to 15%.
According to a report by the city, delivery workers were earning approximately $11.12 per hour with tips and as low as $4.03 per hour without tips prior to the implementation of the new minimum wage.
Delivery apps have seen a decline in tips, which can be attributed to a change in their platforms. Now, customers can only tip after they have already paid for their orders, whereas before, the tipping option was included in the checkout process.
According to a blog post on Dec. 4, Uber is set to introduce a new scheduling system next month. This system aims to reduce the number of couriers who can work on a daily basis.
App companies are now required to pay their workers a fixed hourly wage instead of a per-trip fee. Consequently, these companies will likely reduce the number of drivers on the road in an effort to control their payroll expenses.
According to Uber’s blog post, the new scheduling system will now impose limits on the number of couriers who can be online at any given hour of the day. As a result, couriers will no longer have the freedom to go online and make deliveries whenever they choose.
According to Uber, priority on the schedule will be given to couriers who have completed the highest number of trips in the previous 28 days.
Uber has implemented an extra $2 charge for all delivery orders, whereas DoorDash plans to raise customer fees in the near future.
A DoorDash spokesperson informed The Post on Tuesday that the changes in policies are a direct consequence of the extreme earnings standard implemented in New York City.
According to Uber’s spokesperson, Josh Gold, the city’s study clearly highlights the negative impacts of the new rule. He stated that it leads to job loss, decreases the likelihood of customers tipping, and puts pressure on couriers to work faster and accept more deliveries.
Concerns have been raised by activists who advocated for higher wages, expressing worry that the changes implemented by the app firms may ultimately have a negative impact on workers’ take-home pay.
Ligia Guallpa, executive director of Los Deliveristas Unidos, expressed that the intention behind the initiative is to send a powerful message to deliveristas. The aim is to emphasize the importance of ensuring that the food reaches the customers quickly and in warm condition as a way to earn their tips.
According to Bloomberg, the app companies are now permitted to pay a fixed rate of $29.93 per hour. Drivers will only be compensated for the time spent completing a trip, rather than for their idle time during a shift. This idle time can sometimes make up to 40% of a driver’s shift.
In September, the app companies contested the increase in minimum wage in court, only to have their arguments dismissed by a New York State Supreme Court justice. Consequently, the 2021 law was able to take effect.
The minimum wage is set to increase to almost $20 by April 2025, as stated by the law.
