A first-of-its kind law requiring a minimum wage for app-based delivery workers will take effect after a judge rejected the companies’ bid to block it.
Uber, DoorDash and Grubhub won’t be able to get out of paying minimum wage to their New York City delivery workers after all, following a judge’s decision to reject their bid to skirt the city’s new law. The upcoming law, which is still pending due to the companies’ ongoing lawsuit, aims to secure better wage protections for app-based workers. Once the suit settles, third-party delivery providers will have to pay delivery workers a minimum wage of roughly $18 per hour before tips, and keep up with the yearly increases, Reuters reports.
The amount, which will increase April 1 of every year, is slightly higher than the city’s standard minimum wage, taking into account the additional expenses gig workers face. At the moment, food delivery workers make an estimated $7-$11 per hour on average.
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Don’t worry the drivers will just refuse to pick up your order. Basically the way it works given the companies show the tip to drivers. Especially door dash. Which create an extremely toxic problem where drivers can decide what they think is worth their time or pick something up and fuck with someone’s food cuz they didn’t get “tipped”
Capitalism at its finest
In this specific case, I’d unironically agree, though it’s more the free market than something that would be specific to capitalism. Users put out offers of “pick up this food for me and I will pay you x”, and drivers have the option of taking or leaving any of the offers. If none of them think your order is worth their time, I don’t think forcing any of them to do it anyways is the right thing to do.
Business should be voluntary on both sides IMO.
In an ideal world perhaps one managed by a federated system sure. But the companies they work for take part of their profit should they not be obligated to then treat these people as employees?
Lmao L take. I seriously have to bid on a delivery service? What if I have a cash tip? Which is better cause it don’t technically need to be taxed for them. I am happy to render a tip after service is delivered. But the thought of bidding for something is ridiculous. And it already creates an extremely toxic environment and makes it even more toxic.
Well you can always vote with your wallet and not use those services, choose restaurants with their own delivery services
That’s an auction. I need to keep bidding to get my order
It’s not a tip, it’s a bribe. A tip is given after service has been rendered.
Postmates would only ask for a tip after the delivery was completed. But now they don’t exist anymore so…
Okay, Mr. Pink.
If you are too lazy to pickup your own food and need someone to deliver it to you, then yeah it is your job to pay those people. You expect someone to want to bring you food for free?
No, I think he expects their employer to pay them through the fees they collect. If the tip is mandatory, it’s not a tip, it’s a fee and it should be included in the up front costs with payroll taxes etc deducted.
It’s a bribe, not a fee.
Instead of a bribe, I call it a Bid. I’ll give a tip for good service, somebody waiting around an extra 10 minutes at the restaurant because they’re giving us BOTH the runaround? Absolutely, have an extra bit of cash, you didn’t have to do that for me and I want to compensate that extra effort so they’re more likely to go that extra mile in the future without fear of it hurting potential profits they would have made by dropping me and picking up another order.
Invalids and disabled people use these services too. The problem isn’t they expect it for free, the problem is the people who do the work are not being paid a living wage to do it.
There is a deeper problem that doesn’t get discussed enough: namely, that customer may not actually value delivery enough to pay workers a livable wage. Delivery companies are bleeding money left and right, and none of them are meaningfully profitable. They were riding the money tap from low interest rates for a while, but now that that’s dried up and people are starting to hit their limit of how much they’ll pay in fees for delivery, we’re gonna hit a breaking point, especially as governments start to tighten the rules like this.
Either customers will actually pay enough for this to be a financially viable business, or they won’t. Pretty much every sign has pointed in the negative so far, and the companies are eventually going to run out of money to throw at this. From a teeny bit of research, it seems like the average delivery worker gets somewhere around 3-4 trips per hour. To hit $20 a hour, which isn’t exactly a high wage, each person ordering delivery is going to have to accept adding at least five more bucks or so on top of the cost of their food, and on top of a fee to actually keep the platform itself running, and those engineers aren’t exactly cheap, and even more fees to start paying down the company’s debt (Uber has about 9 billion dollars of debt right now), and even more fees to pay shareholders.
There’s simply quite of lot of cost built into a single delivery trip, and I don’t think the average consumer is really willing to pay it just to save a bit of time and effort getting food. But hey, we’ll see.
Have you ever heard of pizza delivery? Been around for much longer and sooo much cheaper.
It’s similar in some ways but overall a very different business model which doesn’t work out nearly as efficiently.
When you’re delivering pizza, you generally just work out of one location. You have a relationship with the business you’re working at which includes an area set aside for deliveries where drivers can both plan the orders into batches of ones that work well together, considering when they’ll come out of the oven, their destinations, and what the other drivers are doing. When it’s busy, drivers can go in, look over all the current orders (ready or not), and take deliveries to their cars without needing to interact with employees at all. In some locations, they might also be considered kitchen staff and can also do things like pick orders or cook items that aren’t yet ready, allowing them to both provide value to the business (further justifying a wage) and get deliveries out the door sooner.
A lot of that isn’t the case for delivery services. The food pickup can be anywhere, so you can’t just go back to the restaurant and wait, and the pickups need to be optimized just like the dropoffs (if the service even allows you to batch deliveries together). You don’t have that relationship with the business; you’re basically just another customer, so no going to the back to see what’s up or helping the employees when they are swamped.
I’ve done pizza delivery in the past. I didn’t mind it. I don’t think I would like delivering for one of these apps, it sounds like a giant pain in the ass.
Pizza delivery is generally handled by each individual restaurant with some dedicated employees, so it’s a pretty different model than something like Uber Eats. Pizza is also fast, cheap, and simple, so that helps to drive down costs. It’s also generally a complete meal for at least two people, if not a whole group, and so the delivery cost gets split across more people.
I get the comparison, but I don’t think they’re really as analogous as they seem. One is a pizza place hiring a delivery person or two to drive some pizza around; the other is a large tech company settled with debt and inventor obligations paying very expensive engineers to manage incredibly complicated logistics networks and deal with tens of thousands of distinct parties.
This is really kinda my point. Why is pizza delivery so much cheaper? Because it doesn’t have to deal with all these extra costs that a massive delivery network like Uber inherently has to manage. I imagine we’ll eventually hit some kind of equilibrium where a lot of restaurants that can manage it have their own in-house delivery people, while the large networks will have to dramatically downsize or die.
If I take everything you say as true at face value. Then the business was a shitty idea. The owners of the company who have gambled away the VC money should be the ones on hook for it, not the customers.
It is the employer’s responsibility to ensure their workers get paid. Period.
That’s precisely my point. It’s ultimately a shitty business idea, and will probably eventually fail.
I don’t really understand what you mean by being on the hook for it. Investors will ultimately lose quite a lot of money, workers will lose their jobs, and customers will endure the horror of walking or driving a bit to grab food.
There’s already a delivery fee
I was going to ask… there are delivery fees and likely food is more expensive too if you buy through them?
A tip is merely subsidizing a company’s inability to pay its employees appropriately. I really could care less seeing Stanley Tang (door dash founder/ owner) gamble (and lose) hundreds of thousands of dollars on hustler casino live playing poker while simultaneously claiming his company can’t pay a living wage.
Go back and reread what they said but slower this time.
Bold of you to assume they can read.
You aren’t a smart person, hey?
Pretty sure they get paid regardless of if they’re tipped.
Yeah but if they decide it’s not worth their while without the tip…
Then your food just sits there? Nobody takes it?
The app just tells you “sorry, nobody is taking your order, try again maybe?”
Remember when minimum wage driver work went up for a vote in California under prop 22 and we still voted against it? Im always so mad every election cycle i feel like everyone is a complete moron working against themselves
Copying my own comment from another thread:
In those workers’ defense, the delivery companies spent hundreds of millions of dollars on a disinformation campaign to trick the public into thinking that voting for 22 was in their own interest.
It’s absurd that it was on the ballot in the first place.
Unfortunately corporate advertising works when it comes to elections
Is it fair to call people stupid when they’re facing a literal corporate propaganda campaign? I’d sooner reach for “corporations are evil” than “people are stupid” in that case. Remember how people used to treat you if you were against the Iraq war? And today, we know that thing was unnecessary and awful. Sometimes powerful people just manage to convince us of things that aren’t true.
You dont have to always be the victim, dont strip away your obligation for due diligence just because some corporation made a nice commercial.
It’s not one or the other. The corporate propaganda works because people are stupid.
I agree in so far as the human brain is pretty fucking stupid and easily “hacked.” Especially when companies literally pay psychologists to get better at brain hacking.
Guess who’s about to keep all employee tips… A minimum wage is a great first step, but stricter regulation will be needed to curtail the absurd levels of greed from these megacorps.
Guess who’s going to stop playing 20% for tips now that I don’t have to subsidize a subhuman wage?
Honest question to the lemmy users here, but do people believe the solution to the affordability crisis in the US is to raise the salaries of every single job out there (menial or skilled)?
Looking to have a real conversation and not just a ‘fuck capitalism’ one (and yes, I know it sucks, but I’m looking for a real conversation).
No, the optimal solution is to have a society where all the blood and sweat equity that has been put into the system by workers is finally repaid, and the capitalist leeches of the world are knocked off their thrones. Workers created the abundance that allowed the billionaires of the world to get fat while they let others starve, and only once that misappropriation of resources is ended can we fix the issues that the oligarchs have created.
I agree. I’m having a hard time understanding how raising the salary of delivery workers to what an entry level doctor, engineers or lawyer is going to solve the problem. There are two things that might happen, either all the other salaries in the world will then also increase (and thus services too), keeping the wealth disparity the same, or, since these delivery companies already operate on such thin margins (GrubHub net profit for past years have been negative $millions), they are going to pass the cost to the consumer. It creates an interesting problem where then it’s too expensive to get delivery so you don’t order food, which means less delivery jobs are needed so people are laid off, preventing people from making money. Also, from what I’ve seen, most of the workers seems to be immigrants. While I’m not saying we take advantage of immigrants, but these low barrier to entry jobs have always been helpful for those who have complicated statuses.
I’m not bashing any delivery worker (I used to work at a wings shop in my youth), but the amount of interaction you spend with a delivery worker is usually minimal. It doesn’t require any formal training and neither being a bad one is going to affect whether you are in the mood for Thai food.
The federal minimal wage is still the same. $18 an hour is still low in New York. If anything, the law just gets rid of jobs people should not have been going for in the first place.
Yes, wages need to proportionally keep up with the rate of inflation, otherwise you are literally getting paid less to do the same work every year.
This part I haven’t figured out. Seems chicken and egg to me. If we keep raising wages to match inflation, the costs of good measured to match inflation will also go up and we end up with higher inflation right?
Yes. Higher wages actually is the solution.
I dont think raising minimum wage will help. It just forces the service to raise the cost of the delivery fee. I don’t know the answer to the affordability crisis, but it ain’t that!
I come in peace, because you wanted an honest answer/real conversation. .
I disagree with you but upvote for engaging. People are really bad about using that as a disagree button.
I agree that raising minimum wage won’t help, but I still think it needs to be done. For as long as our shitty treasury targets a 3% YoY inflation rate (and esp when it goes way over that), the minimum wage needs to keep pace. Personally, I’d greatly prefer that we lower our target inflation rate but that’s a totally different discussion.
I don’t think it forces them to increase the cost of the delivery fee, I think it gives them an excuse too. They always want to. To anyone that has used meal deliveries, we know that it is wildly overpriced as is, to the point where it’s downright foolish to use any of them. They can try to increase their prices if they feel ‘forced’ to (read:want to maintain profit margins), but the fact of the matter is they’ve already done the math to maximize profit and determined that fees any higher will result in fewer customers and less profit. That will shift a little as the upfront cost of providing the service does, but they simply can’t go much higher without losing more customers than it’s worth. I hope I’m wrong though, because if it does force them to go much higher then the entire delivery ecosystem of apps will collapse and that would be a good thing.
I don’t know the answer to the affordability crisis either but I do know that meal deliveries are not part of that crisis. It is an extremely overpriced luxury service. They are about as worried about being affordable as Apple and Cadillac are. Frankly, I’m rooting for their downfall.
Very good points. I hadn’t thought of the downfall of delivery to be an option, but I can understand that. The inflation stuff is a little over my head but if we constantly target higher inflation, what is the end game? We can’t raise all salaries realistically and have a loaf of bread cost $20 in the end. Is the future meant to have less humans?
Well. It doesn’t force the service to do so, the higher ups just decide they want to preserve their pockets and charge the customer more.
aaaand THAT is the real fucking issue here. All these low wages are completely unnecessary but the C-suite needs their bonuses to increase YoY!!!
Yes, it comes out of worker compensation, what’s your point?? If wages go up we will have to raise prices instead of cutting (or even limiting increases) into our poor leadership’s bonuses and compensation /s
Yes @missveeronica, love peace, love discussion! I am curious what other alternatives we have or what people can think of. It’s obviously a very tough problem since the US government can’t seem to (agree to) fix it. Things that pop in my mind:
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I understand this is a basic overstatement, but in general, people work so that they can afford a house. I think housing prices have gone bonkers in recent years, partially due to foreign investors and the flipping houses/Airbnb craze. One thing that pops into my mind is to impose a flip tax, where unless the owner personally lives in a house for 4-5 years, they pay a large tax when selling the home. This of course applies to corporations as well but with the added spice of larger tax if the inventory was empty the entire time. If we can make housing affordable again, I think the need for higher salaries is less of an issue.
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Revamp the food stamp system and make it universal to everyone. This ties into universal basic income, but I think if everyone was part of a food stamp program, it would make it less stigmatized and there would be a wider offering of choices available. This could be very cool.
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Aside from the usual tax billionaires/term limits/socialize healthcare ideas, it seems that we have an issue where things can get out of hand from people who are greedy. I don’t know how to solve this problem, but I feel like if there was some website that showed what companies are owned by who, we could vote with our dollars and level the playing field. I hate that I found out after years the gym I belong to is owned by some nutjob and I’ve been patronizing him. If there was some visibility into where my money was going, it might educate people where their money is going.
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are you really questioning if people deserve a competitive wage in which they can actually live on?
Do you believe the solution is instead to limit which jobs get paid a wage you can survive on? I’m not saying all jobs, but you better believe higher wages to the workers and less to the C-suite is 1000000000000% a better solution.
Do you have ANY idea how much wealth has been transferred from the workers to the elite since just 2020?? Open your fucking eyes
According to Forbes, the 10 richest people, as of 30 November 2021, have seen their fortunes grow by $821 billion dollars since March 2020.
The wealth of the world’s 10 richest men has doubled since the pandemic began. The incomes of 99% of humanity are worse off because of (and following) COVID-19. Widening economic, gender, and racial inequalities—as well as the inequality that exists between countries—are tearing our world apart. This is not by chance, but choice: “economic violence” is perpetrated when structural policy choices are made for the richest and most powerful people. This causes direct harm to us all, and to the poorest people, women and girls, and racialized groups most.
I am not saying people don’t deserve a living wage. Raising the minimum wage helps solve short term problems, but from what I see, doesn’t help fix the high cost of living. The cost of living needs to be lowered somehow, and I was curious what people thought on this. I don’t think the money to subsidize the workers are going to come from the CEOs salaries…
It’s the wrong question. The question isn’t “why shouldn’t people get paid more” but “why should profit even exist?”
Profit exists only as excess value and does nothing to help anyone except those already so rich they can’t spend it.
I don’t think it’s the wrong question. Profits exists in every society and many countries are capitalist or have their own flavor of capitalism. If the idea is to create a system where those who excel are rewarded, then profits need and should exist. In a capitalist economy, this drives better products, better services, etc. Additionally, the opposite of profit (loss), serves as a great metric to determine whether something is worth doing. If the customer wants a pure gold toilet, but only has $50 to spend, your going to offer them spray paint instead of the real thing.
There are some bad apples that abuse profits, and disproportionately hoard all the value, but I’m looking to discuss my original question.
I’d argue a meritocracy is impossible. how does one determine the best person at writing marketing copy, or mowing lawns, or cleaning gutters? You end up creating a race to the bottom of speed, price and lack of safety or security. Only the most ruthless, manipulative, careless end up winning.
Profit is excess — so it’s not a natural byproduct. No one ever lowers prices, but you can, no one ever splits out excess wealth to workers but you can. It’s not impossible.
I’d ask you does captialism create a better product? We’re here on Lemmy, so its especially pertinent to ask whether reddit was better as a free product for the benefit of everyone, or is it better as a for-profit model with ads, gold, awards, data vending, paid tiers etc?
Same for privatization of railroads, water, power. When is an example of (long term) improvement of private ownership?
Same for Healthcare, why is it better to have more expensive service, less access, more barriers but a better paid middleman?
The current way we determine those things are clickthroughs for marketing copy, ratings or repeat clients for landscapers and gutter cleaners. I’ve definitely hired someone before and said, damn they did a good job, I’d have paid more for that.
I’d disagree profit is excess. At most companies, if a product or job is profitable, the extra money is used for R&D, taking risk on new things and giving bonuses to people who really stood out. Profit is required for products in services so then you can reinvest and provide more value to users.
I think that capitalism generally does create the best product. In the US we are leaders in technology, research, aerospace and infrastructure. I’m not saying we are #1 in everything, but the process does work and time and time again companies and countries use products developed from the US.
The most talented people in their fields come here because they have the ability to earn money for their talents. While it’s not a perfect meritocracy, generally the best in their field stand out.
Regarding healthcare, railroads or other private services. The best thing is that they are private, and if something comes to disrupt the status quo you are free to take your dollars elsewhere. Same thing with lemmy; while I’d argue reddit (at the moment) has a lot more engaging and varied content because of it’s user base, I chose to stick with lemmy because I like it’s value propositions.
Privatisation isn’t terrible, look at what SpaceX has done, completely turned the space industry sideways. For healthcare you have new companies like Oscar, which have given people immediate access to telemedicine. In Japan, the Japan Railways (JR) is a massive private railway organization that provides bullet trains and local trains across the country: it can be done.
Layoffs incoming.
Nope.
To those who live there: How does $18/hour in NYC compare to $20/hour in California (for the fast food thing recently passed here)? Is that a living wage there?
Household income for me and my wife was around $150k and we got priced out of the city. A lot of Dashers take late night trains deep deep outside of the city, or they live with half a dozen other Dashers on alternating schedules, sharing beds.
What a horrifying reality.
Not a resident of either but it’s worth mentioning that this is NYC not NY state and California probably has suburban and rural areas that are much, much cheaper cost of living than NYC.
I don’t see how this doesn’t kill business for these companies.
Edit: I’m not defending the decision not to pay people more in general. It’s more about the service going away altogether because the wage cost will be passed into the customers. But if that’s what you fuckers want ok. I don’t live in NY so it doesn’t affect me. Enjoy losing access to all your delivery services.
If you can’t afford to pay your employees a fair, living wage, then you don’t deserve to stay in business. Capitalism in a nutshell.
I would say regulated capitalism in a nutshell. Raw capitalism wants to pay workers as little as possible for as much production as possible.
Capitalism requires regulation. If you don’t have regulation you can only have capitalism for an incredibly short amount of time. This was all detailed in Adam Smith’s book when he invented capitalism.
Lemmy seems to dream up this strawman of Capitalism while having a very rose tinted outlook on Communism. Everyone seems to miss that these are all problems with humans, not your favorite economic system.
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Especially if it’s a service. Maybe if your service business can’t generate enough revenue to pay your employees then it’s a service that doesn’t need to exist?
Or maybe the people profiting off of that service are making too much profit at everyone else’s expense.
I don’t see why that’s a problem.
Normally I wouldn’t give a shit. But for these P2P businesses the unit economics for the business to be profitable requires passing on that expense to the end customer.
I’m not going to pay an extra $10+ dollars or whatever for my meal when I’m already tipping, paying tax, and service charge.
So I’m saying while it sounds awesome to pay people more, in this case it will just cause these services to go away.
Everyone down voted me like I’m defending the companies, but that’s not my intention. It’s more that these services as they are won’t exist, so everyone loses. The employees lose the job and their customers lose the service. The company goes out of business too but that’s not the issue I care about. We will effectively all lose delivery services except those willing to pay a lot for it, which stifles demand and makes the problem worse.
Anyway… I’m totally willing to hear counterarguments and certainly on the side of the workers, but the knee-jerk downvote and talk about how everyone needs a living wage isn’t helping dive into the nuance of how these businesses operate and make money and what impact this decision will have on the business model.
Life was just fine before those services you’re worried about losing. They aren’t necessary.
I can say that too, and I agree with it. It’s easy to say that.
Meanwhile the folks who relied on it as some part time extra cash just lost that option.
I thought the invisible hand of the market was a good thing…
If your business plan cannot make a profit under the laws of where you want to operate, why should anyone care?
Good. If you can’t afford to pay your employees minimum wage, you should die as a business.
They can make less profit in order to cover paying employees a fair wage.
They will still be make a profit, which means all of their business expenses are covered. Those who pocket that profit will also be richer than you can ever hope to be.
I don’t see how this doesn’t kill business for these companies.
That’s because you don’t know what you’re talking about.
