New York City’s minimum-wage hike has boosted pay for food-delivery workers who have managed to hang onto their jobs, but thousands have lost work — even as the price to get a meal delivered goes through the roof, according to a report by city officials.
A December law that hiked pay to nearly $20 an hour – which delivery apps including Doordash, Grubhub and Uber Eats had tried to block with a lawsuit last year – is boosting paychecks significantly, according to the report by the city’s Department of Consumer and Worker Protection.
Those still employed earned 22% more during the first quarter – or $28.3 million per week – compared to the previous quarter and 42% more versus a year ago, according to the report. That’s despite the fact they worked 22% fewer hours per week, according to the report released late last week
The average hourly wage was $19.26 including tips, up sharply from $11.72 a year ago, according to the report.
At the same time, however, the total number of active worker accounts on delivery apps dropped to 99,000 — down 8% from the previous quarter and 9% from a year ago, the study found.
That’s a signal that thousands are out of work since the controversial law was enacted. City officials estimate the worker accounts are held by 65,000 delivery workers citywide, with some making deliveries on more than one app.
The cost of food deliveries, meanwhile, has surged a whopping 10%, according to the report. That includes a 12% increase in restaurant menu prices for delivery and a 58% increase in the fees the apps tack on to cover the higher wages.
In response, customers are tipping less. While apps raised delivery fees by an average of $2.30 per order, the average tip amount decreased by $2.64, according to the report released Thursday.
They’re also using the apps less for delivery, according to Andrew Schnipper, who owns the Schnipper’s burger joints in Manhattan, one on 8th Avenue near the Port Authority and one on Lexington Avenue and East 51st Street in Midtown.
“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,” Schnipper told The Post. “That indicates a change in behavior.”
In the end, the average food-delivery bill increased 76 cents, to $39.11 per order, the report found.
Despite rising tabs, the number of deliveries rose 8% to 2.8 million in the first quarter versus a year ago, even as customers paid 10% more — or $103 million, according to the report.
The rosy picture DCPW lays out is misleading at best, the delivery apps claim.
Grubhub said in a statement, “”DCWP predicted in its 2022 study that couriers would earn more, but that earning opportunities would be concentrated in fewer hands. Today’s report shows that this is true.”
UberEats claimed the number of delivery workers on its app has plunged by 12,000 since the new law went into effect, adding in a statement, “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.”
UberEats also claims there is a waitlist now for the first time with some 27,000 New Yorkers seeking delivery work.
The city has argued that before the wage law went into effect the app companies had no incentive to limit the number of workers available to them, because they didn’t have to pay them for the time they waited to get orders to deliver, referred to as “on call time.”
Now workers are mostly scheduled to work during shifts, making “better use of workers’ time,” the city said.
Ligia Guallpa of Los Deliveristas Unidos, which fought for the minimum wage law, blames the job losses on the apps’ punitive policies, claiming that they are deactivating workers who “declined to ride faster or accept every order offered to them.”
The app companies are “recruiting new workers every day, trying to replace workers who are pushing back,” Guallpa told The Post.
Some 50 to 70 delivery workers are being deactivated every day, according to the group.
Doordash shot back in a written statement that the city’s report used “cherry-picked figures” that “don’t tell the whole story.”
We’ve heard time and time again from users on all sides of our platform that the new rules simply aren’t working,” Doordash said in the statement.
“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 added.
The city report is the first to analyze data from January to March that the app companies submitted to the Department of Consumer and Worker Protection, which is charged with regulating the delivery industry and monitoring its compliance with the minimum wage law.
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