According to reports, UberEats is cutting food delivery workers’ hours and tips to offset New York City’s minimum wage hike.
NYC Pitches Almost $24 Minimum Wage for UberEats, DoorDash Workers by 2025 – (Photo: Bloomberg)
New York City’s Minimum Wage Hike Boosts Delivery Workers’ Pay, but Tips Take a Hit
Bloomberg reports that DoorDash, Grubhub, and UberEats delivery workers’ take-home income has increased since New York City’s $17.96 minimum wage took effect on December 4. A decline in tips, which made up to half of drivers’ earnings, cancels out this beneficial gain. Pay stubs obtained by Bloomberg show tips have dropped to 5–15% of income.
According to a city report, delivery workers made $11.12 with tips and $4.03 without tips before the minimum wage raised. The drop in gratuities may be due to delivery apps’ platforms now offering tipping after users pay for their items rather than before checkout.
Starting next month, Uber will minimize the number of daily couriers using a new scheduling system. This is a response to the new rule demanding a defined hourly wage instead of a trip fee, which will reduce drivers as app businesses manage payroll costs. Uber’s scheduling mechanism prioritizes couriers with the most rides in the past 28 days.
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Delivery Giants Implement Fees and Price Hikes Amidst New York City’s Minimum Wage Battle
Uber charges $2 for all delivery orders to cover labor costs, while DoorDash expects to hike pricing in the coming months. Both corporations credit these adjustments to the city’s new minimum wage ordinance, which they challenged in court but lost in September. Higher wage activists worry that these changes may force drivers to work harder for tips, lowering their take-home pay.
The new regulation also allows app firms to pay $29.93 per hour for trip completion, not idle time, which can account for 40% of a shift. Despite the employers’ legal fight, the minimum wage will rise to approximately $20 by April 2025.
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