New York city expands minimum wage for grocery delivery drivers

In July 2023, New York City enacted new legislation aimed at enhancing protections for grocery delivery drivers. This legislative package included several significant changes, such as mandating that delivery platforms offer a 10-percent tipping option upfront and ensuring that drivers are paid within seven days after their pay period ends. A major aspect of this new law was the expansion of the minimum wage mandate, extending it from restaurant delivery workers to grocery couriers, with the hourly wage initially set at $19.96 and subsequently increased to $21.44. Despite the intentions behind these changes, the city's experience with wage mandates has not produced favorable outcomes. After the initial legislation in 2023, overall delivery pay increased. However, this also resulted in a substantial rise in the cost of delivery services, leading many drivers to exit the industry. Data indicated an alarming 8 percent reduction in the delivery workforce, while food delivery prices soared by 10 percent, of which restaurant prices alone increased by 12 percent and app fees skyrocketed by 58 percent. The situation in New York was mirrored in other cities, particularly Seattle, which introduced its own minimum wage for delivery drivers in 2024, setting rates at $26 per hour. The immediate aftermath in Seattle was stark, as the introduction of this wage mandate caused the delivery system to falter, with apps imposing additional fees leading to customers facing bills with nearly 30 percent of the cost unrelated to the actual food purchased. Feedback from drivers indicated that demand plummeted and some experienced their earnings cut by more than 50 percent, as fewer orders passed through the platforms. As cities grapple with the repercussions of these wage mandates, the consequences of the New York City Council's decisions could signal higher grocery prices for all residents. Despite visible challenges and warnings from other cities, the Council remains resolute in its progressive approach, raising questions about the balance between fair wages for workers and the affordability of services for consumers.