A judge has blocked New York City's minimum wage law for food delivery workers from going into effect on July 12 until there is a hearing for a lawsuit filed by DoorDash and Grubhub against the city.
The law, announced last month, would increase pay for app delivery workers to $17.96 per hour before tips on July 12 and bump up the minimum wage to nearly $20 per hour in April 2025. Delivery worker pay would also be adjusted annually for inflation.
However, a lawsuit filed jointly by DoorDash and Grubhub to the Supreme Court of the State of New York alleges that the city's new law would damage their businesses and harm delivery workers more than it would help them. Uber — the parent company of Uber Eats — filed a separate lawsuit against the city challenging the law.
New York City's minimum wage law comes after online meal delivery services surged in popularity during the pandemic, and food delivery volumes still remain higher than pre-Covid levels.
On Friday, Judge Nicholas Moyne set oral arguments for the case for July 31, and blocked the law from going into effect until that hearing date.
In a statement, a spokesperson for DoorDash celebrated the judge's order.
"Today's decision is an early and promising victory for consumers, local businesses, and delivery workers across New York City, protecting them from the harmful and lasting impacts of an extreme earnings standard that resulted from a fundamentally broken process. We hope that this puts us on the path towards the city establishing a more reasonable earnings standard that reflects how these platforms are used by New Yorkers," the company said.
DoorDash had previously called New York City's law "bad policy."
Grubhub also said it was pleased with Friday's decision and that the company "looks forward to presenting our arguments and explaining why the City's rule, while well-intentioned, is the result of an arbitrary and irrational rule making process."
A representative from New York's Department of Consumer and Worker Protection Commissioner did not immediately respond to a request for comment.
In response to the lawsuits filed by DoorDash, Grubhub and Uber, the department's commissioner, Vilda Vera Mayuga, said Thursday that "the minimum pay rate will help uplift thousands of working New Yorkers and their families out of poverty. We look forward to the court's decision and to apps beginning to pay these workers a dignified rate."
According to a news release from the city, Manhattan's 60,000 food delivery workers currently make $7.09 per hour, on average.
However, the DoorDash and Grubhub lawsuit claims that the New York City Department of Consumer and Worker Protection's analysis of the regulation would add an average of $5.18 per order.