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By: Benyamin Davidsons
The minimum wage hike in New York City, which was meant to help workers, has led to more food delivery workers losing their jobs, per a new city report released late last week.
As reported by the NY Post, the report says thousands of NYC food delivery employees have lost their jobs, even though menu prices have soared. In December, the minimum wage for delivery workers, which were considered essential workers during the pandemic, increased to nearly $20 an hour. The delivery apps including Uber Eats, Doordash and Grubhub had tried last year to block the wage increase with a lawsuit, complaining that they would have to raise their menu prices in order to pay the significantly higher salaries.
A new report by the city’s Department of Consumer and Worker Protection says those employees who still kept their jobs earned 22% more during the first quarter compared to the previous quarter, and 42% more compared to a year ago. That’s despite the fact they worked 22% fewer hours per week, according to the report. The average hourly wage was $19.26 including tips, up sharply from $11.72 a year ago, the study found.
Unfortunately, though, the total number of active worker accounts on delivery apps dropped to 99,000 — down 8% from the previous quarter and down 9% compared to a year ago, the report released Thursday said. Per the Post, this means that thousands of the delivery workers lost their jobs since the controversial law was enacted. City officials estimate that there are actually about 65,000 delivery workers citywide, with some making deliveries on more than one app leading to duplicate worker accounts.
Meanwhile, the cost of food deliveries leaped by roughly 10%, according to the report. That includes a 12% increase in restaurant menu prices for delivery and a 58% increase in the fees tacked on by the apps to cover the increased wages. Also, per the Post, in response to the higher prices, food customers have been tipping less. The average tip amount decreased by $2.64, while apps had raised delivery fees by an average of $2.30 per order, according to the report.
Also, some restaurant owners say customers have been using the apps less for delivery. “I do think that there is a higher cost to consumers and we are seeing more people order online but pick up in the store to avoid the higher fees,” said Andrew Schnipper, who owns the Schnipper’s burger joints in Manhattan. “That indicates a change in behavior.”
Overall, the average food-delivery bill increased by 76 cents, to $39.11 per order, the report said. Despite the increased prices, the number of deliveries jumped 8% to 2.8 million in the first quarter compared to a year ago, per the city report. The study is the first to analyze data from the app companies from January to March submitted to the Department of Consumer and Worker Protection, which is responsible to regulate the delivery industry and monitor its compliance with the minimum wage law.
The food delivery apps commented expressing their continued disapproval of the wage law. UberEats claimed the number of delivery workers on its app fell by 12,000 since the new law went into effect. “The couriers who are still able to work need to work much harder, doing 80% more deliveries per hour than they did before the rule took effect,” the company said in a statement.
