Preview
FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023
Exhibit 44
FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023
RULEMAKING ON MINIMUM PAYMENTS FOR FOOD DELIVERY
WORKERS, LOCAL LAW 115 of 2021
Last Updated 12.8.22
TESTIMONY: NYC DEPARTMENT OF CONSUMER AND WORKER PROTECTION
Tech:NYC is a nonprofit member-based organization representing roughly 800 technology companies in New York. Our
membership includes some of the largest and most innovative tech companies in the world as well as hundreds of small and
growing startups. We are committed to supporting New York’s economic recovery and to ensuring that all New Yorkers can
benefit from innovation. Tech:NYC and our members work with government and community partners to foster a dynamic
ecosystem so that New York remains the best place in the country to start and grow a technology company.
Since restaurant and food delivery platforms were first established in NYC, these platforms have changed the way New
Yorkers interact with restaurants and businesses. It is estimated that today there are over 65,000 delivery workers in New
York City. On-demand delivery services have also expanded rapidly since the beginning of COVID-19, as platforms are
providing consumers with more options than ever. In addition to food prepared by restaurants, New Yorkers can order
groceries, household goods, and other supplies through web based delivery platforms. Today, delivery apps and services
are more popular than ever. Resulting from laws passed by the City Council in September 2021, the city has recently
established new workplace protections for delivery workers and will continue this progress with the implementation of
Local Law 115 of 2021.
Tech:NYC agrees with the goal of establishing a minimum payment standard for delivery food delivery workers. New York
City has regulatory experience with pay standards for for-hire-vehicle drivers, who use ride sharing platforms in a similar
manner, by using multiple platforms at a single time and maintaining a flexible schedule. In addition to establishing a
minimum pay rate, it is also crucial that delivery workers have access to protections and compensation when injured on the
job and unable to work. The food delivery platforms being asked to comply with these rules will need to make significant
overhauls of their current platforms and apps, and will be required to make serious investments both initially and over time
to remain in compliance. In order for these rules to work more effectively for platforms and delivery workers, and to avoid
increased food delivery costs to NYC consumers that could result in decreased orders for restaurants, Tech:NYC
recommends the following amendments to the proposed rules.
Minimum Pay Formula
Tech:NYC supports the Trip Time component of the minimum pay formula as an accurate base for delivery worker
compensation, but does not support the incorporation of On-Call Time as currently defined in the delivery worker
compensation model. This is due to the dynamics of “multi-apping” and how delivery workers use delivery platform apps in
practice.
How Delivery Platform Apps are Used
Delivery workers often have multiple delivery platform apps open at one time, which allows the workers to complete
assignments from one app while still looking for assignments on another. Delivery workers also have the flexibility to accept
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FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023
delivery assignments at their discretion, which means that they often have delivery platform apps open even though they
are not actively looking for or prepared to accept their next assignment. Delivery workers have the option to, and
frequently decline assignments, and they remain logged into delivery apps even while they are not actively looking to
confirm new delivery routes. One of the benefits of independent contractor positions is that delivery workers control their
own schedule; some only work dinner shifts, while others work only during lunch or while they are on break from other jobs
they hold.
Impacts of the Proposed Pay Formula
Due to the existing model that allows delivery workers to decline offers, work for other platforms, and engage in personal
activities while the app is open, the On-Call Time formula would result in an inaccurate and unproportionate payment to
workers, which would not be justified or covered by the revenue that platforms generate on each delivery. Due to the
foreseeable inability to compensate workers for time spent with delivery platform apps open, platforms would need to
develop methods to limit the time workers spend on platforms, likely by temporarily removing them from platforms when
they are inactive or do not accept new deliveries. This will reduce the number of assignments being presented to the
delivery workers, and will serve against the interest of workers. Platforms would also be faced with decisions on restricting
the number of delivery workers allowed to use their apps at a certain time, restricting the ability of workers to accept or
reject delivery assignments, and prohibiting workers from using multiple food delivery platforms at once. These dynamics
have also been seen in the for-hire vehicle sector as a result of prior NYC TLC regulations, and how drivers are compensated
for “down time” in between accepted rides. For-hire vehicle driver pay formulas were recently updated based on negative
driver feedback.
The costs of compensating delivery workers for the amount of time that they are logged into delivery apps but not engaged
in deliveries would also likely need to be accounted for by additional revenue and fees, which would end up impacting the
wallets of NYC residents who order food through delivery platforms as well as the restaurants preparing the meals.
According to DoorDash, more than 40% of NYC deliveries facilitated by their platform in Q3 of 2022 were made to residents
of low income communities, who would be more severely impacted by any new price increases. Tech:NYC is also concerned
that increased costs of providing food delivery due to an inaccurate On-Call Time formula would result in lower demand
from customers to order meals through delivery platforms, which will mean there are less orders for restaurants to prepare
and for delivery workers to fulfill.
Proposed Minimum Pay Amendments
The proposed rule’s definition of On-Call Time doesn’t translate in practice as it is intended to, and does not reflect the time
that it takes delivery workers to actively review potential delivery assignments and accept or reject them. Tech:NYC
recommends that DCWP consider a different approach for calculating the time that delivery workers spend looking for or
accepting delivery assignments. Based on how delivery workers use these platforms, the amount of time that drivers have
apps open prior to rejecting orders should not be incorporated into On-Call Time, or any calculation for minimum pay. The
formula for delivery worker pay should accurately take into account how and when drivers are using apps, and not factor in
time spent on apps from outside of the city or even the state. The proposed compensation formula leaves many
opportunities for manipulation by delivery workers who may seek to be paid for On-Call Time without actually taking
orders. Tech:NYC recommends that DWCP consider alternate methods to compensate delivery workers for their time spent
actively looking for delivery assignments, when not simultaneously completing one for another platform. A simple solution
would be to include a multiplier of time spent completing delivery assignments to account for On-Call Time. For example,
the delivery worker’s hourly compensation could include an additional 20% of their total Trip Time pay. This would ensure
that for every hour of trip time, workers are compensated for an additional 12 minutes of time spent waiting and reviewing
accepted offers while online. The proposed formula also favors delivery platforms which currently offer flat hourly pay
rates for delivery workers and will benefit their business models more, as they will need to make fewer structural and
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FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023
programming changes to their platforms. Due to this, eliminating the proposed On-Call Time pay formula will help to make
the pay standards more evenly applicable among all delivery platforms. Additionally, Tech:NYC recommends that DCWP
considers incorporating some amount of tip compensation into the total hourly delivery worker pay, as the proposed base
pay rate prior to additional benefits meets NYS’s minimum wage of $15 per hour.
Lastly the proposed base pay amount is stated as being similar to the amount that would be paid to these workers if they
were “classified as employees under state and city law”. Tech:NYC believes it is important to note that these delivery
workers operate under the benefits of independent contractors, including flexibility in schedule and many other aspects,
which do not apply to employees.
Workers’ Compensation Component
Tech:NYC agrees with DCWP’s findings that compensation for loss of wages or medical expenses for on-the-job injuries
should be incorporated into a minimum pay structure for delivery workers. As proposed, the $1.70 per hour rate would go
directly to workers rather than be directed to a workers’ compensation fund to assist delivery workers during times of
need. Ideally, the city should allow platforms to contribute directly to a fund that would provide workers’ compensation
coverage and would help reduce the burden on delivery workers to find and enroll in a workers’ compensation fund. As
seen with the Black Car Fund which provides workers’ compensation to for-hire vehicle drivers, legislation in Albany would
also need to be passed to set up a new sector specific workers’ compensation fund that delivery platforms can directly
contribute to. In order to provide flexibility for delivery platforms that provide their own injury insurance while allowing a
sector specific workers’ compensation to be established in the long run, Tech:NYC recommends that DCWP allows an
exemption to the $1.70 hourly payment for delivery platforms that provide occupational accident insurance for their
delivery workers using their platform.
Recordkeeping & Reporting
Regarding the proposed new rules on recordkeeping, the metrics and trip details that the city is requesting to be provided
go well beyond the details necessary to confirm compliance with minimum pay standards for delivery workers. The amount
of information required to be submitted to DCWP will result in new compliance costs for delivery platforms, which also may
impact customer prices. Local Laws 110 and 114 of 2021 both require food delivery platforms to share certain trip details
with DCWP. Tech:NYC recommends that DCWP further clarify and eliminate redundant and duplicative metrics that delivery
platforms need to report to the agency.
Implementation Timeline
The impacted platforms will need at least 120 days to make the programming changes necessary to comply with these new
regulations, which would include rebuilding each platform’s smart phone application. While the standard delivery pay
structure is similar to what is seen in some other states, it will still take time for the platforms to build out NYC market
specific apps. The new programs developed to comply with the proposed rules would also need to be tested internally prior
to rolling out, which would require additional time. Tech:NYC advocates against the inclusion of On-Call Time as a factor in
food delivery worker pay as proposed, as this would be a novel approach and require new programming in order to
incorporate it into the platforms offering delivery services in NYC, further delaying an implementation date.
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Preview
FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023 Exhibit 44 FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023 RULEMAKING ON MINIMUM PAYMENTS FOR FOOD DELIVERY WORKERS, LOCAL LAW 115 of 2021 Last Updated 12.8.22 TESTIMONY: NYC DEPARTMENT OF CONSUMER AND WORKER PROTECTION Tech:NYC is a nonprofit member-based organization representing roughly 800 technology companies in New York. Our membership includes some of the largest and most innovative tech companies in the world as well as hundreds of small and growing startups. We are committed to supporting New York’s economic recovery and to ensuring that all New Yorkers can benefit from innovation. Tech:NYC and our members work with government and community partners to foster a dynamic ecosystem so that New York remains the best place in the country to start and grow a technology company. Since restaurant and food delivery platforms were first established in NYC, these platforms have changed the way New Yorkers interact with restaurants and businesses. It is estimated that today there are over 65,000 delivery workers in New York City. On-demand delivery services have also expanded rapidly since the beginning of COVID-19, as platforms are providing consumers with more options than ever. In addition to food prepared by restaurants, New Yorkers can order groceries, household goods, and other supplies through web based delivery platforms. Today, delivery apps and services are more popular than ever. Resulting from laws passed by the City Council in September 2021, the city has recently established new workplace protections for delivery workers and will continue this progress with the implementation of Local Law 115 of 2021. Tech:NYC agrees with the goal of establishing a minimum payment standard for delivery food delivery workers. New York City has regulatory experience with pay standards for for-hire-vehicle drivers, who use ride sharing platforms in a similar manner, by using multiple platforms at a single time and maintaining a flexible schedule. In addition to establishing a minimum pay rate, it is also crucial that delivery workers have access to protections and compensation when injured on the job and unable to work. The food delivery platforms being asked to comply with these rules will need to make significant overhauls of their current platforms and apps, and will be required to make serious investments both initially and over time to remain in compliance. In order for these rules to work more effectively for platforms and delivery workers, and to avoid increased food delivery costs to NYC consumers that could result in decreased orders for restaurants, Tech:NYC recommends the following amendments to the proposed rules. Minimum Pay Formula Tech:NYC supports the Trip Time component of the minimum pay formula as an accurate base for delivery worker compensation, but does not support the incorporation of On-Call Time as currently defined in the delivery worker compensation model. This is due to the dynamics of “multi-apping” and how delivery workers use delivery platform apps in practice. How Delivery Platform Apps are Used Delivery workers often have multiple delivery platform apps open at one time, which allows the workers to complete assignments from one app while still looking for assignments on another. Delivery workers also have the flexibility to accept 1557 FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023 delivery assignments at their discretion, which means that they often have delivery platform apps open even though they are not actively looking for or prepared to accept their next assignment. Delivery workers have the option to, and frequently decline assignments, and they remain logged into delivery apps even while they are not actively looking to confirm new delivery routes. One of the benefits of independent contractor positions is that delivery workers control their own schedule; some only work dinner shifts, while others work only during lunch or while they are on break from other jobs they hold. Impacts of the Proposed Pay Formula Due to the existing model that allows delivery workers to decline offers, work for other platforms, and engage in personal activities while the app is open, the On-Call Time formula would result in an inaccurate and unproportionate payment to workers, which would not be justified or covered by the revenue that platforms generate on each delivery. Due to the foreseeable inability to compensate workers for time spent with delivery platform apps open, platforms would need to develop methods to limit the time workers spend on platforms, likely by temporarily removing them from platforms when they are inactive or do not accept new deliveries. This will reduce the number of assignments being presented to the delivery workers, and will serve against the interest of workers. Platforms would also be faced with decisions on restricting the number of delivery workers allowed to use their apps at a certain time, restricting the ability of workers to accept or reject delivery assignments, and prohibiting workers from using multiple food delivery platforms at once. These dynamics have also been seen in the for-hire vehicle sector as a result of prior NYC TLC regulations, and how drivers are compensated for “down time” in between accepted rides. For-hire vehicle driver pay formulas were recently updated based on negative driver feedback. The costs of compensating delivery workers for the amount of time that they are logged into delivery apps but not engaged in deliveries would also likely need to be accounted for by additional revenue and fees, which would end up impacting the wallets of NYC residents who order food through delivery platforms as well as the restaurants preparing the meals. According to DoorDash, more than 40% of NYC deliveries facilitated by their platform in Q3 of 2022 were made to residents of low income communities, who would be more severely impacted by any new price increases. Tech:NYC is also concerned that increased costs of providing food delivery due to an inaccurate On-Call Time formula would result in lower demand from customers to order meals through delivery platforms, which will mean there are less orders for restaurants to prepare and for delivery workers to fulfill. Proposed Minimum Pay Amendments The proposed rule’s definition of On-Call Time doesn’t translate in practice as it is intended to, and does not reflect the time that it takes delivery workers to actively review potential delivery assignments and accept or reject them. Tech:NYC recommends that DCWP consider a different approach for calculating the time that delivery workers spend looking for or accepting delivery assignments. Based on how delivery workers use these platforms, the amount of time that drivers have apps open prior to rejecting orders should not be incorporated into On-Call Time, or any calculation for minimum pay. The formula for delivery worker pay should accurately take into account how and when drivers are using apps, and not factor in time spent on apps from outside of the city or even the state. The proposed compensation formula leaves many opportunities for manipulation by delivery workers who may seek to be paid for On-Call Time without actually taking orders. Tech:NYC recommends that DWCP consider alternate methods to compensate delivery workers for their time spent actively looking for delivery assignments, when not simultaneously completing one for another platform. A simple solution would be to include a multiplier of time spent completing delivery assignments to account for On-Call Time. For example, the delivery worker’s hourly compensation could include an additional 20% of their total Trip Time pay. This would ensure that for every hour of trip time, workers are compensated for an additional 12 minutes of time spent waiting and reviewing accepted offers while online. The proposed formula also favors delivery platforms which currently offer flat hourly pay rates for delivery workers and will benefit their business models more, as they will need to make fewer structural and 1558 FILED: NEW YORK COUNTY CLERK 07/06/2023 10:16 AM INDEX NO. 155943/2023 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 07/06/2023 programming changes to their platforms. Due to this, eliminating the proposed On-Call Time pay formula will help to make the pay standards more evenly applicable among all delivery platforms. Additionally, Tech:NYC recommends that DCWP considers incorporating some amount of tip compensation into the total hourly delivery worker pay, as the proposed base pay rate prior to additional benefits meets NYS’s minimum wage of $15 per hour. Lastly the proposed base pay amount is stated as being similar to the amount that would be paid to these workers if they were “classified as employees under state and city law”. Tech:NYC believes it is important to note that these delivery workers operate under the benefits of independent contractors, including flexibility in schedule and many other aspects, which do not apply to employees. Workers’ Compensation Component Tech:NYC agrees with DCWP’s findings that compensation for loss of wages or medical expenses for on-the-job injuries should be incorporated into a minimum pay structure for delivery workers. As proposed, the $1.70 per hour rate would go directly to workers rather than be directed to a workers’ compensation fund to assist delivery workers during times of need. Ideally, the city should allow platforms to contribute directly to a fund that would provide workers’ compensation coverage and would help reduce the burden on delivery workers to find and enroll in a workers’ compensation fund. As seen with the Black Car Fund which provides workers’ compensation to for-hire vehicle drivers, legislation in Albany would also need to be passed to set up a new sector specific workers’ compensation fund that delivery platforms can directly contribute to. In order to provide flexibility for delivery platforms that provide their own injury insurance while allowing a sector specific workers’ compensation to be established in the long run, Tech:NYC recommends that DCWP allows an exemption to the $1.70 hourly payment for delivery platforms that provide occupational accident insurance for their delivery workers using their platform. Recordkeeping & Reporting Regarding the proposed new rules on recordkeeping, the metrics and trip details that the city is requesting to be provided go well beyond the details necessary to confirm compliance with minimum pay standards for delivery workers. The amount of information required to be submitted to DCWP will result in new compliance costs for delivery platforms, which also may impact customer prices. Local Laws 110 and 114 of 2021 both require food delivery platforms to share certain trip details with DCWP. Tech:NYC recommends that DCWP further clarify and eliminate redundant and duplicative metrics that delivery platforms need to report to the agency. Implementation Timeline The impacted platforms will need at least 120 days to make the programming changes necessary to comply with these new regulations, which would include rebuilding each platform’s smart phone application. While the standard delivery pay structure is similar to what is seen in some other states, it will still take time for the platforms to build out NYC market specific apps. The new programs developed to comply with the proposed rules would also need to be tested internally prior to rolling out, which would require additional time. Tech:NYC advocates against the inclusion of On-Call Time as a factor in food delivery worker pay as proposed, as this would be a novel approach and require new programming in order to incorporate it into the platforms offering delivery services in NYC, further delaying an implementation date. 1559