Delivery drivers working for platforms such as DoorDash and Uber Eats in New York City saw wages grow by more than $7 per hour following implementation of a new minimum wage law, according to report shared by city officials.
The data reveals the initial impact of controversial pay regulations on the growing food delivery market. New York City began enforcing a minimum wage law for delivery drivers in December; Seattle implemented a similar law in January.
Worker earnings in New York City rose from $11.72 per hour to $19.26 per hour after tips in the first quarter of this year, up 64% from the year-ago period.
The report from the city’s consumer and worker protection group also said that the number of deliveries increased by 8% — “showing that the industry continues to grow even while workers earn a more dignified wage,” the city said in a news release.
The report said that while pay per hour increased substantially, tips per hour fell 60% year-over-year. The companies changed tipping mechanisms within their apps after the law went into effect.
Other takeaways from the report (see in full below):
- The number of total workers fell by 9% year-over-year.
- Total consumer spending rose by 10% to $108.3 million.
- Fees paid by consumers rose to an average of $20.1 million per week, or a 58% year-over-year increase.
DoorDash and Uber have strongly opposed the new regulations. They implemented new consumer fees in what was described by the companies as a way to offset the pay standards.
In a statement to GeekWire, a DoorDash spokesperson called the new data report from New York City a “misleading and blatantly biased assessment of the impact of the minimum pay rules,” and “completely out of touch with what countless Dashers and merchants are experiencing every day.”
“The cherry-picked figures from the City don’t tell the whole story,” a spokesperson said. “We’ve heard time and time again from users on all sides of our platform that the new rules simply aren’t working, and the real numbers bear out that sad truth: higher costs causing thousands of lost orders for Dashers to deliver and millions of dollars in lost revenue for local businesses.”
DoorDash recently called the minimum pay law in New York City “devastating.” It said consumers placed around 850,000 fewer orders on DoorDash in a two-month period, while the number of new delivery drivers fell by 20%.
“Rather than trying to convince New Yorkers that the City’s extreme and broken minimum pay rules are working, we will continue what we’ve been focused on since these policies took effect — working to find a better approach that works for Dashers, merchants, and customers alike,” a spokesperson said.
New York City’s minimum pay rate was at least $17.96 per hour in the first quarter. The city raised the standard in April to $19.56 per hour, before tips.
New York’s data comes from DoorDash, Uber Eats, FanTuan, Grubhub, and HungryPanda. The companies are required to produce data per city regulations.
We reached out to the City of Seattle for data on driver pay and consumer orders since January. “Currently, data, including pay data and worker numbers, are solely controlled by the apps,” said a spokesperson for Seattle’s Office of Labor Standards.
After Seattle’s existing law was implemented in January, Uber and DoorDash added a $5 fee to every consumer order and have been lobbying councilmembers to revise or axe the legislation.
Seattle City Council President Sara Nelson in April introduced a bill that would lower the minimum wage standard for drivers from $26.40 to $19.97 per hour.
The council was set to vote on CB 120775 in May, but it abruptly postponed the vote to consider amendments.
Now it remains unclear when or if Seattle lawmakers will vote on potential changes.
DoorDash and Uber sent letters to the Seattle City Council in recent weeks, urging them to pass CB 120775.
The response from drivers in Seattle is mixed. Some want the city to keep the existing pay standard because they are earning more money. But others say they are making substantially less income and receiving fewer orders — and at least one .
Restaurants owners also offer conflicting opinions — some support the current law, while others say the lack of demand is hurting their business.
DoorDash said in May that regulations in New York City and Seattle reduced its total orders by less than 1% during the first quarter.
Seattle’s Office of Labor Standards said it has received 107 worker inquiries related to the minimum pay law since January. One escalated into an investigation of Roadie, a UPS-owned same-day delivery company that agreed to pay more than $22,000 to 185 workers in back wages.
Related: DoorDash and Uber fed up with Seattle council standstill on food delivery driver pay
New data reveals impact of minimum wage law on food delivery drivers and orders in NYC by GeekWire on Scribd