Testimony of New York City Comptroller Brad Lander before Department of Consumer and Worker Protection public rules hearing regarding Local Law 115
Good morning and thank you to the Department of Consumer and Worker Protection for the opportunity to testify today. I am New York City Comptroller Brad Lander, the proud City Council sponsor of both Local Law 115 of 2021 which established the minimum per-trip payment requirement for third-party food delivery and courier service workers, and also the sponsor of the earlier Local Law 150 of 2018 which established similar minimum pay requirements for for-hire drivers. Thank you for the work to promulgate these rules, for taking the plight of deliveristas seriously, and for your openness to testimony about changes to the draft rules that are needed to make sure they achieve the goals of the legislation and the worker-led campaign that led to it.
App-based delivery workers risked their lives through the pandemic to provide food to New Yorkers, enabling many of us to remain in our homes. They continue to provide food and other goods to so many of us on a regular basis, amidst extreme weather (like the rain of the past two days, and much worse) and health and safety risks on the streets which are functionally their workplace – all at subminimum wages and without benefits. Out of that experience, they organized a moving and powerful campaign that captured the attention of New Yorkers, demanding justice and fair treatment, which led to a package of bills including LL 115.
As a result, New York City now has an opportunity to lead the nation by establishing a minimum wage standard for this growing industry that adequately compensates delivery workers for their labor and their pivotal contributions to our city and its economic recovery. I am encouraged by the seriousness with which the Department undertook the required study of working conditions of third party food delivery workers, including income, expenses, required equipment, modes of transit and safety conditions.
However, the proposed rules require several important revisions to ensure they enable all deliveristas to get the pay and dignity they deserve:
1. Workers must be paid at least the $15 minimum wage, after business and independent contractor expenses, starting on January 1, 2023.
The current proposal, even by its own standard, keeps workers at a sub-minimum hourly wage of $13.74 for the first year, with no workers compensation or health insurance, after business and independent contractor expenses are factored in. That would be the case even if workers were compensated in full for their total worktime, which as discussed below is not required and must be also revised. While it was reasonable to apply a phase-in for the $15 minimum wage across the entire economy in New York State when State legislation was adopted back in 2016, it is not appropriate to regulate delivery workers into a subminimum wage now, six years later, when all other workers are guaranteed $15 per hour. The 2018 Taxi and Limousine Commission rules for for-hire drivers did not include a phase-in, but instead were structured to insure that drivers would immediately be paid at least $15 per hour after business and independent contractor expenses. There is no reason to treat deliveristas worse than that. The proposed phase-in should be eliminated, and the minimum compensation rate immediately set at a level that ensures a worker $15 an hour after all incurred business and independent contractor expenses. In addition, that rate adjustment should reflect maintenance and safety costs and tax treatment, regardless of whether the worker delivers by car, moped or bike.
2. Workers must be paid for their waiting time.
The present proposal does not require companies to pay individual workers for the time they are waiting for their next trip. While it includes waiting time in the aggregate calculations, it would allow a company to only pay some of its workers for their time on trips, and then to give bonuses to other workers. The results could be dire. In year one, as currently structured, the rule would allow DoorDash, Seamless, or Uber Eats to pay a worker who was on trips at the industrywide average rate of 61% of the time, just $8.38 per hour. Even when the proposed phase-in is completed, the rule would allow companies to pay individuals workers just $9.15 an hour. That is simply unacceptable. Time that workers are waiting for the next assigned task is working time. We don’t allow telemarketing firms to only pay employees while they’re talking but refuse to pay them while they are waiting for their next call. We don’t allow offices to only pay their receptionists while they are letting someone in the door. We don’t allow fast food restaurants to refuse to pay their workers in those times when there aren’t customers in the store. That’s what the app companies are doing to delivery workers, and it is simply wrong.
While I do not oppose companies offering bonuses to high-performing workers (as long as those compensation structures do not encourage behavior that is dangerous to the safety of workers and other street users/pedestrians), they cannot replace fully compensating every worker for their total work time. Bonuses and incentives must come after a worker has received sufficient payment for their entire time working, including both trips and waiting, that allows them to net $15 an hour after business and independent contractor expenses. This missing $5.85 an hour must be guaranteed. Integrating a utilization rate into the calculation of payments earned, in line with the methodology adopted by TLC, would serve the department’s stated goals of “allowing apps to increase the amount of time workers spend engaged in trips and reduce the amount of time workers spend waiting for trip offers” – and it would guarantee deliveristas appropriate income for all the time spent working.
3. The formula for COLA increases must be revised to account for inflation in business expenses, and changes to the state minimum wage.
While the proposed rules do propose automatic increases in the minimum compensation standard, they are insufficiently tailored to ensure that workers will not fall below minimum wage due to changes in state law or disparate inflationary impacts on expenses and purchasing power. The formula should accordingly be revised to peg the base amount and worker compensation components to no less than the state minimum wage and separately calculate inflation for the base and expense components after an annual review of expenses. This is the same methodology that the Taxi and Limousine Commission uses for app-based for-hire drivers. At a time when transportation-sector business expenses have faced an inflationary rate three times the overall increase in the consumer price index, this revised approach is required by § 20-1522(c).
Thank you very much for your consideration of these comments, and for your commitment to the wellbeing of deliveristas, as you move forward to finalize and implement these critical rules.
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