When New York City’s minimum wage law for app-based delivery workers came into effect in December, workers were guaranteed a minimum wage of at least $17.96 per hour. Yet advocates and delivery workers say that apps like UberEats, DoorDash, and Grubhub have been finding ways to avoid paying the new wages.
Since December, according to the New York Department of Consumer and Worker Protection (DCWP), which is responsible for enforcing the new wage standards, the agency has received approximately 500 complaints from delivery workers about apps failing to comply with the minimum pay rate. DCWP says that they are currently investigating all the complaints they have received.
“The apps are becoming more aggressive towards workers,” said Ligia Guallpa, executive director of the Workers Justice Project. “Workers are getting strikes for taking longer than what the app estimated for example. They don’t take consideration for traffic.”
One way the delivery apps are avoiding paying the minimum wage is through arbitrarily deactivating workers from their accounts. Ever since the new minimum pay rate was established, every week, Guallpa says that her office has seen an increase in account deactivations. Of the 150 to 200 workers who come to her with issues regarding the apps every week, about 40 of those workers seek help specifically for deactivation issues.
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Workers have almost no opportunity to appeal once deactivated from a delivery platform and often, they are not informed on why they were deactivated in the first place. Guallpa says she believes the companies are devising new methods to scrutinize delivery workers.
“They are penalizing the workers who are going slower, obeying the traffic laws,” she said. “The apps never rated how long it took you to make the delivery. Now they are rating that. They are trying to reduce the labor costs because they don’t want to pay the minimum.”
However, DCWP says that more than 300 of the complaints they have received are specifically about Uber’s decision to switch how they calculate delivery workers’ pay.
Under the current law, the app companies are allowed to choose one of two methods to calculate pay for workers. They can either pay a rate of $17.96 an hour for all of the time a worker is logged into the app, including waiting time, or they can pay an alternative method rate of $29.93 an hour that only pays workers for the time it takes for them to make a delivery. It does not pay workers for the time they spend waiting for an order.
Uber and DoorDash are both paying workers the $29.93 an hour alternative rate. Many workers are only aware that they are being paid by the alternative method at the end of the week.
According to law, the companies are not required to inform workers which payment method they are using. Still, the second payment method can only be used if a company has a utilization rate above 53 percent and is measured weekly. An app’s utilization rate is the amount of time a worker takes while on a delivery for the app, divided by their workers’ total time that they connected to that app, including both “trip time” and “on-call time.”
As an example, according to DCWP, if a delivery worker spends 10 hours on trips for an app during a pay period, the apps cannot pay that worker less than $299.30 for the period. A pay period is the seven-day period that the app sets to calculate the money it owes workers.
DoorDash worker and Los Delivery Boys member Sergio Sonano, 39, says that since the new minimum wage rates came into effect, he has made less money.
“It was much better than before,” he said. “Right now everything is messed up. We were supposed to get more and work less.”
Almost immediately after the new wage law took effect, the delivery apps began removing tipping options at checkout, causing drivers to receive far fewer tips than they had before the minimum wage rules. That, coupled with the apps choosing to pay the alternative wage rates, has caused Sonano to yearn for how things used to be. “I work a minimum of 16 hours, but I only get paid for the hours I deliver, not for the time I wait and I make almost no tips like before.”
But Guallpa says that the two payment structures are a loophole that the apps are taking advantage of and has deliberately led to mass confusion among workers.
“Giving the apps the flexibility to choose the method of payment to use week to week, was just a horrible decision by the [mayor’s] administration.”
Uber argues that because of DCWP’s minimum wage rules, companies will be forced to compete against each other to reduce the amount of online time a driver is earning in an effort to save money. To reduce labor costs, Uber says it has little choice but to limit the amount of workers that use the app and to take steps to ensure workers are delivering as efficiently as possible.
“It’s an extremely complicated payment standard, which has not surprisingly led to a lot of confusion,” said Hayley Prim, senior policy manager for Uber. “Unfortunately, we’ve seen a lot of policymakers and third parties imply that individual workers get paid for all online time, which isn’t true and has exacerbated the confusion.”
Prim goes on to say that DCWP’s new rules incentivize the apps to compete against each other to reduce the number of drivers that are being paid for on-call time.
In December, UberEats introduced a new policy that will limit the number of workers who can be online each hour of the day. Workers must now reserve times to go online during a specific week. Priority access will be given to workers who complete the highest number of trips in the previous 28 days and maintain a high acceptance rate.
DoorDash has also made changes to its platform that limit the number of delivery workers who are delivering on their platform at any given time and also pay workers the alternative method of payment of $29.93 an hour. The company also said that they reject any complaints against them made by workers to DCWP.
“We have not received any information from the Department of Consumer and Worker Protection about complaints related to the new minimum pay rate, and are not aware of any evidence to support these claims,” said a DoorDash spokesperson. “Every New York City Dasher has their earnings reviewed each week to ensure it meets the minimum pay requirements, and any Dashers who earn below the minimum receive a pay adjustment. We look forward to engaging with the DCWP to correct the record and clear up this misinformation.”
A Grubhub spokesperson told Documented that they have been clearly and proactively communicating with their delivery partners on the new pay standard and changes they can expect to their pay, stating: “Grubhub is complying with the minimum pay standard for delivery partners in New York City while maintaining a sustainable business given the added costs to operate in the market.”
