NYC food delivery gig workers score a big minimum wage victory

https://www.theverge.com/2023/6/12/23757900/nyc-food-delivery-minimum-wage-uber-eats-doordash-postmates

by carride • 3 years ago

30 96 3 years ago

hezralig9• 3 years ago

I am unsure if this is a wage that workers receive while clocked in maneuvering to "hot zone" activity areas in order to get orders OR if it only applies when a worker has accepted an order.

Browsing reddit.com/r/ubereatsdrivers and /r/ubereats has led me to believe that the majority of these workers spend their time waiting between orders and that they will not receive an order waiting in a stationary location for too long (i.e. they could be ready+willing to accept an order for hours and would be penalized if they did not actively drive or if camped out in a parking lot/home).

If it is the latter case, then these workers can still receive a sub federal minimum wage if there aren't many orders placed or if the algorithm decides to prioritize one worker over another.

With the new able bodied working requirements for SNAP and other benefits, I wonder if it is possible that gig workers can be engaged in work activity for 80+ hours per month while not technically meeting that requirement. That would mean they would make less than minimum wage and be cut off from healthcare and food assistance.

Simulacra2• 3 years ago

I can't afford food delivery as it is now, I'm afraid this will just push it to skyrocketing prices and demanding tips.

godzillabrennus• 3 years ago

Yeah, which is probably best, most of us would benefit from eating out a lot less.

It’s also better to have jobs that pay living wages than jobs that don’t.

That said, it sucks the government had to get involved at all.

hezralig9• 3 years ago

After having an issue with an order, I investigated reddit.com/r/ubereatsdrivers and /r/ubereats to discover than many of these drivers aren't really earning more than a base rate of a couple of dollars (literally ~$2) plus whatever we leave as tips.

It seems like these delivery platforms have positioned themselves in such a way that they are extracting a pound of flesh from restaurants, customers, and underpaying their workers.

LadyCailin• 3 years ago

If the thing you want can only be economical by exploiting laborers, then too bad, you have to live without that thing.

willio583• 3 years ago

Solid point. It's like when Uber stopped subsidizing their rides as much and people started freaking out. We get complacent thinking we deserve these services with little cost, when real humans are the ones providing these services and we're essentially thinking they shouldn't make enough money to live well.

WalterBright4• 3 years ago

And then those workers are unemployed.

nebula88042• 3 years ago

Thats the entire western way of life.

Look at Purism attempting to make a phone in the US: It costs 2000$...How many people would be willing to pay 2000$ for an iPhone? Lets say Apple can be more efficient than a startup like Purism, maybe they can get to 1500$?

The recent labor shortages in Florida were caused by undocumented migrants being scared by Desantis's stupid immigrant law.

Lets not forget the COVID supply shortages which in hindsight were not a complete collapse thanks to a lot of sacrifice by people who we never see and never think about.

China is going offline either now with greater tensions or later due to their demographic bomb and so far Apple and others are making progress transitioning to Vietnam, thailand etc to stave off the eventual truth that the west is structurally bankrupt. Maybe robots will save us? Thats what all the elites are banking on.

lastofthemojito• 3 years ago

He said it 90 years ago but I still agree with FDR:

"no business which depends for existence on paying less than living wages to its workers has any right to continue in this country"

http://docs.fdrlibrary.marist.edu/odnirast.html

cde-v• 3 years ago

Agreed. Farms should not be businesses and should be taken over by the government.

ChadNauseam• 3 years ago

I agree. But we should make them nonexistent by giving better options to their workers. (I assume that workers would not take sub-living-wage jobs if living-wage jobs were available to them.) Making the jobs illegal without introducing a superior alternative is not the favor many people think it is.

lumb632• 3 years ago

Consider the contrary idea from Thomas Sowell: “ Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed.”

How many workers would work for less than a living wage and are prevented from doing so by minimum wage laws and instead denied jobs?

legitster2• 3 years ago

The problem is that "living wage" is such a subjective litmus test. A student living at home and a single mother of 5 have completely different standards.

FDR's statement was also clearly implied a constant wealth level of the country overall. But you could imagine lots of runaway economic situations were pulling people out of the workforce causes the "living wage" to rise which would require pulling people out of the workforce until you just do not have enough economic productivity to support your population (which is kind of a version of what Venezuela went through).

willio583• 3 years ago

If you can't afford food delivery I wouldn't blame the delivery workers. They make near nothing (this bumps them up to a little more than nothing for NYC).

I hear a lot of complaints about food delivery prices. And I can't help but fight back a little because:

1. Food costs more. If you go to fast food or local restaurants you will see prices have risen. The cause of this is debated but it doesn't change the fact that food costs more.

2. Delivery workers work pretty hard to do what they do. Due to a lack of good American public transportation (especially outside of NYC) most delivery workers have to drive their own cars which is a cost that gets more expensive with time as cars have a limited amount of miles and tend to break down somewhat randomly with age.

3. Maybe most importantly, you don't need food delivered. Unless you're disabled, it's inherently an out-of-touch argument because there's nothing stopping you from making your own food or going to pick up food. It's a luxury, so I believe the prices aren't really that crazy if it means the workers can make livable wages. And if you're disabled, we should have better systems in place for you than saying "use doordash".

- edited to account for disabled people.

Sohcahtoa826• 3 years ago

Maybe most importantly, you don't need food delivered. Nobody does.

People with disabilities would beg to differ. There's a reason Meals on Wheels exists.

mountainofdeath3• 3 years ago

Food costs are up overall because (assuming USA) 1. COVID and immigration enforcement severe restricted immigration (legal or otherwise) of farm workers who formed the backbone of farm labor. 2. Oil and gas is critical import for food production. Fertilizer comes from natural gas, farms burn diesel, etc. All of this adds up.

Food delivery always was a luxury especially when it's just for one or two people. Unfortunately, you can't generate exponential growth on wealthy families ordering Friday evening takeout.

et-al• 3 years ago

Food delivery startups were a scam anyway.

It was always performed by under-the-table workers and somehow VCs thought there's money to be made there.

Ekaros• 3 years ago

I always found these companies weird. Like they bloat so much to grow fast, but that bloat just kills their whole model in the end.

Most people have a threshold for costs. And the head count in tech and marketing doesn't help at all with keeping it under that cost.

asnyder• 3 years ago

NYTimes post and discussion: https://news.ycombinator.com/item?id=36307496

spywaregorilla9• 3 years ago

I feel like there's a good opportunity for labor arbitrage or whatever you want to call it.

1) Get 10 friends

2) All friends log on to deliver food from 2am to 5am. Sleep and get paid.

3) When someone actually gets an order, you, and only you, do the labor. You can adjust the logic to cover edge cases where you don't actually have enough labor to fulfill the demand. We could call it surge pricing.

Uber for Uber Eats.

AFAIK, unlike Uber, there's no user auth to make this hard to do for food delivery.

vkou3• 3 years ago

Paying people who aren't doing any work is generally the cost of providing 24/7 service coverage for a business, yes. Many people hired to do night shift have very little to do for most of the night.

Maybe Door dash et al shouldn't 'overhire'.

They pay for it with their health, though.

spywaregorilla9• 3 years ago

It is not clear to me that delivery companies have the agency to deny people's ability to work, however. If you must pay people for time that they are working, but there is no work to do, then you face a challenge with many people signing up to be paid for nothing. What do you do if 100 drivers start saying they're waiting for orders and there are no orders coming in?

What do you do if 100 drivers say they're waiting for orders, and a paltry number of orders come in that, unbenownst to Uber, get delegated to just 5 of those 100 while all 100 collect pay checks?

hezralig9• 3 years ago

As far as I can tell, workers are not being paid for just being online. They get paid a prorated amount of this "hourly" wage during an active order.

spywaregorilla9• 3 years ago

I don't think so. Door dash is complaining that this will result in a $33/hour pay rate for trip time. The law seems to be that you may pay however you like, but it must average out to $18/hour (overall? per person??). So even if you're paying for trip time only, if 10 people are active and doing no trips it would imply the average pay rate for the one guy doing trips must rise to accommodate the non-workers.

So the scheme above doesn't work too well for those folks but the economics for door dash remain the same. It also kind of implies you can create surge pricing for workers by having an overabundance of supply, which is a nightmare scenario for them.

pessimizer4• 3 years ago

2) All friends log on to deliver food from 2am to 5am. Sleep and get paid.

Why would they let everybody log in if they don't get very much delivery business between 2am and 5am? There isn't a law yet that says that companies have to hire everyone who walks in the door for any shift.

spywaregorilla9• 3 years ago

Controlling the hours people work would make their labeling of people as not employees would be very contentious. And there's little difference between trying to log in and get work vs waiting for work.

whywhywhydude• 3 years ago

If this massively increases the cost of online deliveries, won’t it reduce demand significantly? Unless they limit or freeze who can do online deliveries (like they do for uber and lyft), I am not sure if the workers will really be better off.

Graziano_M2• 3 years ago

Demand and tips. I tip my delivery drivers because I know they aren't making $20 an hour. I won't anymore.

renlo• 3 years ago

In New York City you need to leave a tip otherwise the delivery worker won't pick up the order (found this out when trying to tip in cash one time). Tips don't seem to be optional when it comes to delivery in urban areas.

I've a feeling the delivery fee will increase, customers will continue to tip otherwise they won't receive their food, and overall the price of delivery will increase and the number of customers willing to foot the cost will lower.

lelandfe• 3 years ago

I suspect that a. Adequate pay for the delivery person, and b. Adequate profit for both the restaurant and delivery app result in a price few would be willing to pay, yes.

You can only slice this pie so many times.

bryanlarsen• 3 years ago

Virtually all of the cost of delivery is borne by the restaurants. So they can and will just pass the increased costs onto the restaurants and the consumer is unlikely to see any change.

EA-31672• 3 years ago

That assumes a margin in restaurant pricing that simply doesn't exist.

WalterBright4• 3 years ago

won’t it reduce demand significantly?

Of course it will. Supply+Demand, it's the law.

vondur• 3 years ago

I'm assuming that there may be a large drop off in delivery orders as the costs will by borne by the consumer. Maybe people will have to go out like ye olden days and get food themselves. Maybe not, some people are willing to pay more for convenience...

BitwiseFool• 3 years ago

I've only ever ordered gig-economy delivery a handful of times and stopped because of how expensive it was. That being said I have some friends who order restaurant delivery upwards of five times a week. They must not be deterred by the cost and I genuinely wonder how much more prices would need to increase in order to break their habit.

bradleyjg2• 3 years ago

I think probably some workers are better off and some worse, with weighted average being worse.

If I had to guess I’d say it’s people doing this as a side gig and that are good at gaming the system that will come out ahead. Those trying to do it full time for all of their income will come out behind.

pessimizer4• 3 years ago

I haven't found delivery to be any cheaper than it was 20 years ago. It actually seems more expensive, which makes sense because an entire business model with thousands of employees added itself to the process.

Sohcahtoa826• 3 years ago

In the long term, one or both of the following is going to happen:

1. Delivery fees will go up.

2. Delivery companies will put strict limits on how many drivers can be online at once, crippling the narrative in their marketing that drivers can choose their own hours.

The latter is especially likely if companies are required to pay drivers when they're just sitting around and waiting for an order.

omegaworks• 3 years ago

3. Delivery companies are forced to extract less value from the people actually doing the work.

A driver recently shared with me that he made $5 on a $23 ride I booked recently. Uber's margins are absolutely mad.

908B64B197• 3 years ago

It's much better than what he would have made under the old medallion system Uber disrupted.

Pre-Uber/Lyft, either the driver rented the car from a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). Sure back then the dispatch only took a 15-20% cut, but medallion payments took at least a 50% cut on every ride. That money didn't get re-invested or re-distributed as incentives to drivers, no. It went straight to the pockets of the local rent-seeker.

The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber/Lyft brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.

And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).

PreachSoup• 3 years ago

And this is how Uber somehow is taking the upper hand while Lyft is in a downward trend. Nobody was expecting this a few years ago during the boycott Uber scandal.

Food delivery is way more lucrative than taxi business

Sohcahtoa826• 3 years ago

A driver recently shared with me that he made $5 on a $23 ride I booked recently.

Unless the driver went over a toll bridge, that payout rate should be downright criminal.

jackson1442• 3 years ago

Delivery companies will put strict limits on how many drivers can be online at once, crippling the narrative in their marketing that drivers can choose their own hours.

They already do this, if there are too many people online in an area the app will tell you to move to a different region before it will let you go online.

NovemberWhiskey5• 3 years ago

I'll preface this by saying I expect to get downvoted all to hell, but: if these jobs are so bad and so underpaid, why are people doing them in a period of what is reported to be incredible labor market tightness?

hezralig9• 3 years ago

Perhaps the reported data on the prosperity of the average person isn't as accurate?

the_jesus_villa• 3 years ago

Labor stats are not as good as they're advertised, and these jobs aren't as bad as we're told. Both sides exaggerate (while still being kinda true)

NovemberWhiskey5• 3 years ago

In either case, it's interesting though, right? I may be coming across as the free market zealot here, but I don't really understand why special pleading for a class of workers is the right solution here.

If labor conditions are not as good as they're advertised, then isn't the expected outcome here that more people will try to find delivery jobs, resulting in more workers chasing fewer deliveries (assuming prices go up)?

mountainofdeath3• 3 years ago

I believe none of them require proof of employment eligibility e.g. immigration papers so it's a way for those on the fringes of society to make a living. It's basically the same as why people work bad jobs for cash that is less than minimum wage. There are several layers of illegality here but nobody dares speak up.

fnfjfk• 3 years ago

My perspective on this is a little different because I ride a bike in NYC and I do not order delivery food, ever. Thus, I only experienced the negative externalities of these apps on cycling in NYC, and I don't care about delivery food becoming more expensive or whatever.

With the possible exception of the people that ride the new gray Citibike e-bikes, delivery riders are almost unquestionably the worst behaved "cyclists" in NYC. I put "cyclists" in quotes because half of them are just riding mopeds now.

- They ride in whatever direction is most optimal, one-way streets be damned. This is called "salmoning" and it is universally loathed.

- They don't even slow down for red lights half of the time. Look, I know, it's NYC, almost everyone Idaho stops or Idaho slow-rolls, there's even a proposed law to officially legalize it now, but they really take it to another level.

- They have no awareness when starting, they will just fly into a bike lane without checking over their shoulder. Also includes right/lefts on red (also not legal, but everyone does it, and it's pretty much fine if you at least check), they do not check for something riding down the bike lane with the light.

- Less relevant since it's summer currently, but usage of lights at night by these riders is maybe 50% at best. They also wear black a lot... so black bike, no lights, riding the wrong way in a bike lane. Fun!

- The mopeds. Mopeds are unambiguously banned on bike lanes and especially on the bridge bike lanes, but it's impossible to ride over one of the East River bridges these days without being passed aggressively by a gas moped, not even an electric one (which are still banned!).

I don't know if this will make them behave better. I don't see why it would, if they can still maximize profit by putting everyone else in danger.

barbazoo2• 3 years ago

They ride in whatever direction is most optimal, one-way streets be damned. This is called "salmoning"

As someone living next to a Salmon spawning creek, this put a huge grin on my face, I love that term.

bradleyjg2• 3 years ago

I’m not sure if it’s worse for us or you, but as a pedestrian I couldn’t agree more. Ten years ago I thought the macho, aggressive sport riders were bad but they are nothing compared to all these illegal mopeds. The NYPD should just seize every single one without a license plate (and while they are at it all the cars with paper plates and those with license plate obstructors.)

mountainofdeath3• 3 years ago

I agree. I've seen all of the above and more. I've seen full-on motorcycles in bicycle lanes going the wrong direction. I've seen them ride right through a crowded sidewalk,

I was in China recently and it struck me how wide the bike lanes were and mopeds were allowed but everyone generally followed traffic signals.

pcurve2• 3 years ago

I blame this partly on tipping culture.

I just do not understand why the tip amount is proportionate to the value of food being delivered.

The fee should be set based on factors that impact LOE and time that impact delivery. That's it. Just like in the rest of the civilized countries.

Want $9 happy meal delivered to your house? $5 bucks. Want $30 sushi next door to the McD? $5 bucks.

I don't know why we make things so complicated.

barbazoo2• 3 years ago

I just do not understand why the tip amount is proportionate to the value of food being delivered.

Can't you use a custom amount? The way you phrased that makes it sound like it isn't.

pcurve2• 3 years ago

you can, but it defaults to percentage... and that sets the expectation.

NYC food delivery gig workers score a big minimum wage victory

Related Stories