Food delivery fees for New York residents have increased by 58% following the implementation of a minimum wage law, according to a report by the New York City Department of Consumer and Worker Protection (DCWP).
The DCWP’s findings indicate that Uber Eats, DoorDash and Just Eat Takeaway.com’s Grubhub and Seamless have largely transferred the increased costs due to the new wage regulations onto their customers.
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In the first quarter of 2024, New Yorkers spent an average of $20.1m per week on delivery fees, a stark rise from the previous year.
The fees paid by restaurants to the delivery services have seen a comparatively modest increase of 13%.
DCWP’s latest report, released on 11 July 2024, noted that despite delivery couriers’ wages increasing by 64% to an average of $19.26 per hour, their tips have declined by 60%.
In response to the new wage regulations, Uber Eats, DoorDash, and Grubhub have increased service fees and altered tipping protocols to present a lower upfront cost.
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By GlobalDataThe platforms have also introduced scheduling changes to control the number of couriers available at any time.
The number of food delivery contractors in New York has decreased by 9% in the first quarter of 2024 compared to the previous year.
DCWP commissioner Vilda Vera Mayuga said: “The minimum pay rate has been a true success for our city — it has helped lift up some of our hardest working New Yorkers while still allowing the app-based restaurant delivery industry to grow and thrive.
“We will continue to monitor the apps’ compliance to ensure workers are being paid appropriately, but any worker who has questions or complaints should reach out to us immediately.”
Bloomberg reported that representatives from the food delivery industry have criticised the minimum wage policy.
A Grubhub spokesperson stated: “DCWP predicted in its 2022 study that couriers would earn more, but that earning opportunities would be concentrated in fewer hands,” and confirmed that “this is true”.
Contradicting industry concerns, the DCWP report suggests an overall increase in orders, with delivery workers completing 2.8 million deliveries per week in the first three months of 2024, an 8% increase from 2023.
