DoorDash, Grubhub and Uber sue New York City over minimum wage law(cnn.com)
cnn.com
DoorDash, Grubhub and Uber sue New York City over minimum wage law
https://www.cnn.com/2023/07/06/business/doordash-grubhub-uber-sue-new-york-minimum-wage-law/index.html
66 comments
I mean, you should care about their profit margins if you like food delivery. As it stands they're on the verge of bankruptcy.
Restaurants have been able to provide delivery long before a VC intermediary was involved.
I honestly prefer the in house delivery guy.
I honestly prefer the in house delivery guy.
I remember some food delivery app’s ad during the NBA playoffs, and the whole thing was about how the guy would always order a pizza before his game because he had formed a good luck ritual with the delivery guy.
And the first, most obvious thing that struck me was that delivery apps make this impossible, since they assign random delivery guys every time! The pre-delivery middleman days of restaurants employing their own delivery people was when this could actually have worked.
And the first, most obvious thing that struck me was that delivery apps make this impossible, since they assign random delivery guys every time! The pre-delivery middleman days of restaurants employing their own delivery people was when this could actually have worked.
Oh, yes, taxis existed before Uber and other great hits.
I’d go back to taxis in a heartbeat.
Occasionally Uber is cheaper than a taxi. But sometimes it’s also not. Occasionally Uber is more convenient depending where you are. But Uber isn’t some super amazing thing. It’s a taxi service with an app.
Uber eats is barely worth it in Sydney. I don’t save any time using it. So unless I get a coupon I never use it.
Uber eats is barely worth it in Sydney. I don’t save any time using it. So unless I get a coupon I never use it.
Yeah, where I live the taxi is a flat rate $40 to downtown from the airport vs $100-150 on rideshare.
They mostly sucked. The waiting time sucked, the service sucked(there was no reputation for each individual driver), in a lot of places it was a cartel artificially limiting the number of drivers.
The existence of Uber/Lyft is a great benefit to the consumer.
Not for me. Close to zero wait time in their heyday in Chicago. Drivers were the same people. By law they could not refuse a ride and they actually respected the law unlike these companies whose business model depends on ignoring laws. Uber and Lyft just made them slower and more expensive.
Delivery apps can exist without GrubHub just like taxi apps exist without Uber.
Uber and Grubhub are fascinating in that they’ve literally provided nothing in NYC that wasn’t already available 50 years ago, other than putting it on an app and taking a 30-40% cut for it while driving their workers to destitution (while making sure they can get away with not calling them workers).
Convenience and advertisement. Back in the day you'd call a phone number and have to interact with people like a normal human. Phone screens never ask you to repeat your words
Online ordering has been a thing for quite some time, now. There just wasn't an app with a multimillion dollar marketing budget for it.
Nothing preventing a taxi company to implement a system with an app as a frontend.
> other than putting it on an app and taking a 30-40% cut for it while driving their workers to destitution (while making sure they can get away with not calling them workers).
“This is the way.”
- Sequoia, Silverlake et al (probably)
“This is the way.”
- Sequoia, Silverlake et al (probably)
> As it stands they're on the verge of bankruptcy.
Good?
The only reason these companies exist is because a bunch of VCs subsidized them with the hope that there would be network effect lockins that could then be leveraged into an exploitable monopoly position.
Now that money isn't free, the VCs are yanking the subsidy and the market will return to where it should be without the distortion of a bunch of sloshing VC money.
Good?
The only reason these companies exist is because a bunch of VCs subsidized them with the hope that there would be network effect lockins that could then be leveraged into an exploitable monopoly position.
Now that money isn't free, the VCs are yanking the subsidy and the market will return to where it should be without the distortion of a bunch of sloshing VC money.
Charitably I think it exists because VCs assume that economies of scale are more profitable and there is a difficult scaling problem here (connecting N customers to M service providers where N vacillates wildly based on time of week, weather, etc).
Money is still pretty close to free as real rates are close to zero. As soon as inflation subsides I expect rates to come down again. But anyway I think the connection between interest rates and app economies is tenuous at best. We've never had a period with high real rates as well as high smartphone penetration so we don't know for sure, but I think technology will continue marching on and people with money will keep trying to develop new ways to tackle old problems.
Money is still pretty close to free as real rates are close to zero. As soon as inflation subsides I expect rates to come down again. But anyway I think the connection between interest rates and app economies is tenuous at best. We've never had a period with high real rates as well as high smartphone penetration so we don't know for sure, but I think technology will continue marching on and people with money will keep trying to develop new ways to tackle old problems.
Food delivery is a solved problem independent of GrubHub's business model that relies on squeezing as much out of the market as they possibly can.
Isn't making a profit everyone's business model? You can go volunteer at a soup kitchen if you just want to fill stomachs out of the kindness of your heart.
I don't think food delivery is a solved problem. It could get a lot easier, more reliable, cheaper. I generally don't use it because my food doesn't always arrive in great condition (cold, spilled, etc) and it generates crazy amounts of petroleum based waste. At least the apps have made the ordering experience more predictable. From the restaurant owner's perspective, it's probably not practical to keep the right number of delivery people on staff at all times. So the apps help somewhat but the problem still isn't solved. From my perspective the apps create a marketplace where eaters who wish to remain stationary buy delivery services from workers who don't mind ambulation. You can pay the delivery people whatever you want since tipping is part of the culture. If you don't want to participate in the marketplace that's fine too. Most people don't participate in most markets.
I don't think food delivery is a solved problem. It could get a lot easier, more reliable, cheaper. I generally don't use it because my food doesn't always arrive in great condition (cold, spilled, etc) and it generates crazy amounts of petroleum based waste. At least the apps have made the ordering experience more predictable. From the restaurant owner's perspective, it's probably not practical to keep the right number of delivery people on staff at all times. So the apps help somewhat but the problem still isn't solved. From my perspective the apps create a marketplace where eaters who wish to remain stationary buy delivery services from workers who don't mind ambulation. You can pay the delivery people whatever you want since tipping is part of the culture. If you don't want to participate in the marketplace that's fine too. Most people don't participate in most markets.
I don't care about food delivery. I've had food delivered maybe 3 times in the last 5 years. It's amazing what people think they can't do without.
Cool. And I have never played disc golf.
I do not give a flying fuck about their profit margins and if they are to disappear tomorrow.
I mostly cook myself and on rare occasions when I needed food delivery it was never a problem for the last 30 years that I've been in Canada.
I mostly cook myself and on rare occasions when I needed food delivery it was never a problem for the last 30 years that I've been in Canada.
If you mostly cook at home, you're not really involved in their market, so of course you're not going to have a vested interest in what happens. In the same way I'm sure you're not overly interested in what happens to the e-scooter market?
However, I don't think anyone should care about a nascent industry not working out.
However, I don't think anyone should care about a nascent industry not working out.
>"...and on rare occasions when I needed food delivery it was never a problem for the last 30 years that I've been in Canada"
Strongly agree!
Unfortunately, the system is WAI in the US.
Unfortunately, the system is WAI in the US.
> I do not come from a country with a class structure
Excuse me? Where?
Excuse me? Where?
[deleted]
Some hunter-gather society where there is no division of labour and no means for people to accumulate power? There have been class divisions since agriculture and permanent settlement allowed the accumulation of material goods with a corresponding power over others.
In fairness, I’d be curious to know which country has citizens who don’t perceive it as having a class structure.
In fairness, I’d be curious to know which country has citizens who don’t perceive it as having a class structure.
Probably some Scandanavian country, which has class structures but not as starkly as the US.
No country in the world has classes as starkly as the US. No, not even China, not even close.
The argument that a law "would help workers more than help them" is a political argument not a legal argument. The legislature has the right to pass dumb laws so long as those laws are within their constitutional powers and do not infringe or abridge any constitutional rights. Judges have no business legislating on political questions.
I take no position on whether or not the law is actually dumb but the delivery apps need to find a better legal argument if they want to argue this law is unconstitutional. This argument that "the law is unconstitutional because it is dumb" is basically just asking judges to legislate from the bench which is exactly what everybody who pays attention to Supreme Court confirmation hearings knows judges aren't supposed to do.
I take no position on whether or not the law is actually dumb but the delivery apps need to find a better legal argument if they want to argue this law is unconstitutional. This argument that "the law is unconstitutional because it is dumb" is basically just asking judges to legislate from the bench which is exactly what everybody who pays attention to Supreme Court confirmation hearings knows judges aren't supposed to do.
> The DoorDash and Grubhub lawsuit claims the New York City Department of Consumer and Worker Protection’s analysis of the regulation would add an average of $5.18 per order.
I'd rather have them charge the $5 than be guilted into paying the $5 dollars as a 'tip'. Just makes the costs of these purchases more apparent.
I'd rather have them charge the $5 than be guilted into paying the $5 dollars as a 'tip'. Just makes the costs of these purchases more apparent.
This! We have DoorDash in Australia but the drivers cannot see whether a tip is added (it usually isnt - because we have minimum wage laws here too).
The stories I hear about them just ignoring the orders because they are shown there is a tip and that tip is not acceptable to them is ridiculous to me, it's a pay to win strategy that has no place in a supposed civil society.
I am fine overpaying (the restaurants need to cover the frankly ridiculous 30%+ fees they charge) AND then a delivery fee on top to sit on my fat ass in my jammies and have delicious food delivered to me. I am not fine with a bidding structure where my food might sit there cold until someone decides that my "tip" is acceptable
I am fine overpaying (the restaurants need to cover the frankly ridiculous 30%+ fees they charge) AND then a delivery fee on top to sit on my fat ass in my jammies and have delicious food delivered to me. I am not fine with a bidding structure where my food might sit there cold until someone decides that my "tip" is acceptable
These companies are so reliant on a zero-interest-rate market and the increasing prices are bringing this reality home in a big way.
On Friday, I went to UberEats to do basic takeout for 2 in a reasonable cost of living area, and it was $50 total for basic takeout, nothing fancy.
In that situation, the company then expects us to tip knowing that we’re already at the upper limit of what’s considered appropriate pricing for this service. Of course the drivers are gonna get shafted.
The system was intentionally designed to make them as powerless as possible, as evidenced by the fact that these same companies had the gall to garnish tips from the drivers and then pretend like it was some misunderstanding. Anyone who’s written commercial software knows that this is BS.
On Friday, I went to UberEats to do basic takeout for 2 in a reasonable cost of living area, and it was $50 total for basic takeout, nothing fancy.
In that situation, the company then expects us to tip knowing that we’re already at the upper limit of what’s considered appropriate pricing for this service. Of course the drivers are gonna get shafted.
The system was intentionally designed to make them as powerless as possible, as evidenced by the fact that these same companies had the gall to garnish tips from the drivers and then pretend like it was some misunderstanding. Anyone who’s written commercial software knows that this is BS.
"The DoorDash and Grubhub lawsuit alleges that the new regulation is legally flawed because it targets only meal-delivery services and not grocery-delivery services. It also argues the regulation is legally flawed because it would compel the companies to pay workers for hours that they are available to take orders while logged into the delivery apps, even if they don’t actually make any deliveries."
Ah... welcome to the world of managing FTEs. I managed an army of people with TC of $150-$200K with sr. management breathing down my neck to make sure they're delivering value. Wouldn't it be nice if I could pay them based on product shipped and revenue generated :-/
Ah... welcome to the world of managing FTEs. I managed an army of people with TC of $150-$200K with sr. management breathing down my neck to make sure they're delivering value. Wouldn't it be nice if I could pay them based on product shipped and revenue generated :-/
How does this minimum wage work, specifically? One of the selling points as far as I can tell of these delivery apps is that the workers effectively bid per order -- they're not hourly workers, they can choose or refuse which orders they want to take. Workers are not on the clock, obligated to work certain hours, they don't even have hours.
It would be interesting to see an even more market-based delivery app ecosystem -- each contract is auctioned separately, with spot prices for each hour and route of delivery going to the lowest bidder. It would never happen, since it would ruffle to many political feathers, but it's an interesting thought experiment. It would also require much more transparency than the apps currently allow or would ever willingly give up.
It would be interesting to see an even more market-based delivery app ecosystem -- each contract is auctioned separately, with spot prices for each hour and route of delivery going to the lowest bidder. It would never happen, since it would ruffle to many political feathers, but it's an interesting thought experiment. It would also require much more transparency than the apps currently allow or would ever willingly give up.
> they're not hourly workers, they can choose or refuse which orders they want to take. Workers are not on the clock, obligated to work certain hours, they don't even have hours
it seems they ARE hourly workers for the purposes of this law, which makes sense: they're allegedly contractors because they can choose their hours.
if a driver wants to work the 8:00 to 9:00 hour, the delivery app can either:
1. pay them at least the minimum wage for that hour, and assign enough work to fill it, or
2. pay them at least the minimum wage for that hour, and NOT assign enough work to fill it, or
3. don't pay them for that hour, meaning you aren't letting them work that hour, meaning you're determining their hours, meaning they're employees, not contractors
whether [app X] has enough orders to keep occupied all the willing drivers with open [app X] is [app X]'s problem: [app X] choose the business model of unrestricted driver growth
it seems they ARE hourly workers for the purposes of this law, which makes sense: they're allegedly contractors because they can choose their hours.
if a driver wants to work the 8:00 to 9:00 hour, the delivery app can either:
1. pay them at least the minimum wage for that hour, and assign enough work to fill it, or
2. pay them at least the minimum wage for that hour, and NOT assign enough work to fill it, or
3. don't pay them for that hour, meaning you aren't letting them work that hour, meaning you're determining their hours, meaning they're employees, not contractors
whether [app X] has enough orders to keep occupied all the willing drivers with open [app X] is [app X]'s problem: [app X] choose the business model of unrestricted driver growth
One of the earliest and best things the internet does is auctions. Auctioning off delivery contracts individually isn’t profitable. If it were, we’d be doing it already.
> It would never happen, since it would ruffle to many political feathers
Wrong. It would never happen because it would be too unreliable so nobody would use it.
The few times I used DoorDash the orders took twice as long as the estimate even though I live near a city center and always tipped the highest recommended abount.
And that is why these workers are definitely employees who should be paid for their availability.
Wrong. It would never happen because it would be too unreliable so nobody would use it.
The few times I used DoorDash the orders took twice as long as the estimate even though I live near a city center and always tipped the highest recommended abount.
And that is why these workers are definitely employees who should be paid for their availability.
If this really does add $5 to the cost of every delivery it will dramatically reduce demand for deliveries.
This will cause huge demand for delivery jobs, with insufficient supply of jobs. Normally this is rectified with price (wage) adjustments, but not here.
It'll be like rent controlled apartments: A privileged few get high wages (low rent), and no jobs for the rest (high rent in my analogy).
The requirement to pay even when there are no jobs will make it even worse - the companies will require drivers to accept every job or be kicked out, and/or reduce the number of people they accept as drivers. This will make service worse for everyone.
Not smart NY, not smart.
This will cause huge demand for delivery jobs, with insufficient supply of jobs. Normally this is rectified with price (wage) adjustments, but not here.
It'll be like rent controlled apartments: A privileged few get high wages (low rent), and no jobs for the rest (high rent in my analogy).
The requirement to pay even when there are no jobs will make it even worse - the companies will require drivers to accept every job or be kicked out, and/or reduce the number of people they accept as drivers. This will make service worse for everyone.
Not smart NY, not smart.
>This will cause huge demand for delivery jobs, with insufficient supply of jobs. Normally this is rectified with price (wage) adjustments, but not here.
How does this increase demand for jobs if you also say that demand for deliveries decrease? There's only huge demand because it's entry level and/or side-gig level work. Not because deliveries are prestigious.It will just toss the ball to the next lowest barrier to entry job.
>the companies will require drivers to accept every job or be kicked out, and/or reduce the number of people they accept as drivers. This will make service worse for everyone.
People aren't going to stop eating. If it makes the service worse because the customers are choosing to go out themselves or buy groceries, I see that as a societal win. Of course, no decision is without short term downsides, and this is one of them.
Even then, this is only for one (major) city. This situation might take years to spread even if the court case is a slam dunk.
How does this increase demand for jobs if you also say that demand for deliveries decrease? There's only huge demand because it's entry level and/or side-gig level work. Not because deliveries are prestigious.It will just toss the ball to the next lowest barrier to entry job.
>the companies will require drivers to accept every job or be kicked out, and/or reduce the number of people they accept as drivers. This will make service worse for everyone.
People aren't going to stop eating. If it makes the service worse because the customers are choosing to go out themselves or buy groceries, I see that as a societal win. Of course, no decision is without short term downsides, and this is one of them.
Even then, this is only for one (major) city. This situation might take years to spread even if the court case is a slam dunk.
> How does this increase demand for jobs if you also say that demand for deliveries decrease?
Demand for jobs goes up because they pay better. But the jobs are not available because deliveries decrease.
> If it makes the service worse because the customers are choosing to go out themselves or buy groceries, I see that as a societal win.
You are forgetting that it means the drivers now have less work. This change in minimum wage, in the net, will cause a loss for drivers, not a gain.
It will be uneven, when they have work it will pay well, but it will be coupled with large periods of no work. I don't think that's a good thing for the drivers.
> I see that as a societal win
More cars on the road I guess?
> Of course, no decision is without short term downsides, and this is one of them.
What "short term"? Long term this will be bad for drivers in NY.
Demand for jobs goes up because they pay better. But the jobs are not available because deliveries decrease.
> If it makes the service worse because the customers are choosing to go out themselves or buy groceries, I see that as a societal win.
You are forgetting that it means the drivers now have less work. This change in minimum wage, in the net, will cause a loss for drivers, not a gain.
It will be uneven, when they have work it will pay well, but it will be coupled with large periods of no work. I don't think that's a good thing for the drivers.
> I see that as a societal win
More cars on the road I guess?
> Of course, no decision is without short term downsides, and this is one of them.
What "short term"? Long term this will be bad for drivers in NY.
>More cars on the road I guess?
well we're talking New York, I don't think much will change in that regard.
>Long term this will be bad for drivers in NY
food delivery is not the only career for drivers these days, especially in New York. And this seems to assume that there's a lack of supply for minimum wage jobs. I honestly can't prove/disprove that notion, but I don't feel that is the case as of now.
well we're talking New York, I don't think much will change in that regard.
>Long term this will be bad for drivers in NY
food delivery is not the only career for drivers these days, especially in New York. And this seems to assume that there's a lack of supply for minimum wage jobs. I honestly can't prove/disprove that notion, but I don't feel that is the case as of now.
> If this really does add $5 to the cost of every delivery
it wouldn't, because it's an increase in costs, not an increase in prices
if delivery apps choose to increase prices because they want more money, that's their decision: they aren't entitled to exactly the same profit they had before, and if they insist upon it, that's their greed speaking
it wouldn't, because it's an increase in costs, not an increase in prices
if delivery apps choose to increase prices because they want more money, that's their decision: they aren't entitled to exactly the same profit they had before, and if they insist upon it, that's their greed speaking
What profit? What greed? Delivery apps run at a loss.
"DoorDash is not profitable as its net losses amounted to over $1.3 billion in 2022, compared to $468 million in net losses in 2021."
They hope, eventually, someday, to make a profit. This change in NY means they have no choice but to raise prices.
"DoorDash is not profitable as its net losses amounted to over $1.3 billion in 2022, compared to $468 million in net losses in 2021."
They hope, eventually, someday, to make a profit. This change in NY means they have no choice but to raise prices.
they literally aren't entitled to any profit at all, or even a viable business model, so they have a choice to make upon discovering that theirs isn't, and aren't obliged to raise prices
otherwise, how could they be operating at a loss now?
otherwise, how could they be operating at a loss now?
Yeah, movies run at a loss too.
> If this really does add $5 to the cost of every delivery it will dramatically reduce demand for deliveries.
just the news of this made me stop using app delivery altogether
now I go on grubhub to find the restaurant I want, then search for the restaurant's website and order the same food through the restaurant's site
very often the prices on the store's site will be 1-2$ cheaper per item! and i swear I get more food in my orders...
just the news of this made me stop using app delivery altogether
now I go on grubhub to find the restaurant I want, then search for the restaurant's website and order the same food through the restaurant's site
very often the prices on the store's site will be 1-2$ cheaper per item! and i swear I get more food in my orders...
[deleted]
> All three companies sued the city, maintaining that the law would hurt delivery workers more than help them.
Assuming that is really the premise of the lawsuit, could it be thrown out because the drivers aren't employees, and therefore the companies aren't the ones being harmed? Can they sue on the driver's behalf when the drivers are contractors?
Assuming that is really the premise of the lawsuit, could it be thrown out because the drivers aren't employees, and therefore the companies aren't the ones being harmed? Can they sue on the driver's behalf when the drivers are contractors?
7 dollars an hour, plus 3 dollars per delivery is sad, especially in a place like NYC. 17 dollars an hour is still low in today's economy but fine, the minimum wage is only 15.
I hope this gets laughed out of court. Doordash should be ashamed of themselves for thinking their drivers deserve less.
I hope this gets laughed out of court. Doordash should be ashamed of themselves for thinking their drivers deserve less.
i saw Tiktok sued a state government too. It is something amazing that only happens in countries like America. In most of other countries, including China, sueing govementment by citizens or private companies is unthinkable and will be faced with severe consequences and in some cases , deaths. This kind of power check is great.
All this means is that the legal costs are less than their expected loss if the legislation goes into effect.
Good. Hope it's a lose-lose for them, pay your labor
> All three companies sued the city, maintaining that the law would hurt delivery workers more than help them.
This means that shareholders and execs are going to take a minor loss. How dare the city get in the way of their 13th mansion purchase?
This means that shareholders and execs are going to take a minor loss. How dare the city get in the way of their 13th mansion purchase?
I’m just so jaded with capitalism in its current form. Its become too perverse, too immoral, too untethered from society.
The market rallying every time there is bad economic data, collapsing when unemployment goes down is just the clearest indication that something has gone terribly wrong with “market forces”.
The market rallying every time there is bad economic data, collapsing when unemployment goes down is just the clearest indication that something has gone terribly wrong with “market forces”.
The market collapse in response to low unemployment was the result of the Federal Reserve raising interest rates in direct response to high employment and wages, with the stated goal of reducing wages and increasing layoffs to tackle inflation. Capitalism has always been about serving the needs of those with capital, and reducing wages and employment does just that. This has always been its form.
All that pretty much means that “market forces” are in absentia. The invisible hand of the market has been replaced by the invisible hand of the Fed.
This isn’t what capitalism stands for at its core.
This isn’t what capitalism stands for at its core.
boyaka(2)
They cycle the wrong way on the street, they clog up the pavement, and they appear overwhelmingly to be foreign workers (like me, but without the cushy tech job). I understand logically that this must be a good option for them given their circumstances, or they would do something else, but I will not be gaslighted into thinking they are treated well by the delivery companies.
There should be dedicated parking (take away some of the car spots), there should be driver friendly sanitary facilities, there should be ways for them to secure their bikes, and yes there probably should be a minimum wage because they are in an extremely exploitable position and guess who's making money from their exploitation?
I do not come from a country with a class structure, so seeing the emergence of an 'app-class' / zero hours contract approach that OVERWHELMINGLY targets the poor rubs me the wrong way.
I don't care about GrubHub's profit margins and neither should you.