Motion-Secondary: Doordash, Inc., Grubhub Inc. v. New York City Department Of Consumer And Worker Protection, Vilda Vera Mayuga , in her official capacity as Commissioner of the New York City Department of Consumer and Worker Protection

On July 06, 2023 a Motion-Secondary was filed involving a dispute between Doordash, Inc., Grubhub Inc., and New York City Department Of Consumer And Worker Protection, Vilda Vera Mayuga , In Her Official Capacity As Commissioner Of The New York City Department Of Consumer And Worker Protection, for Special Proceedings - CPLR Article 78 in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 08/01/2023 03:55 PM INDEX NO. 155947/2023
NYSCEF DOC. NO. 81 RECEIVED NYSCEF: 08/01/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------------------------------------- X

DOORDASH, INC. and GRUBHUB INC.,

Index No. 155947/2023
Petitioners,
SUPPLEMENTAL
-against- AFFIDAVIT OF SAMUEL
KRINSKY IN OPPOSITION
NEW YORK CITY DEPARTMENT OF CONSUMER TO PETITIONER’S
AND WORKER PROTECTION; VILDA VERA APPLICATION FOR A
MAYUGA, in her official capacity as Commissioner of the PRELIMINARY
New York City Department of Consumer and Worker INJUNCTION
Protection; THE CITY OF NEW YORK,

Respondents.

----------------------------------------------------------------------- X

STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )

SAMUEL KRINSKY, being duly sworn, deposes and says:

1. I am the Executive Director of Policy and Analytics of the Office of Labor

Policy & Standards at the New York City Department of Consumer and Worker Protection

(“DCWP”). I described my responsibilities with DCWP and professional qualifications in my

affidavit of July 18, 2023, Docket Number 53.

2. I submit this affidavit in response to the Court’s request in the conference

held on July 25, 2023 for further detail about how DCWP calculated each aspect of the minimum

pay rate, DCWP’s treatment of on-call time in the Minimum Pay Rule, and whether the Minimum

Pay Rule requires apps to deactivate workers.

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3. I use the term “Minimum Pay Rule” herein to refer to the portions of Title

6 of the Rules of the City of New York (“R.C.N.Y.”) §§ 7-801, 7-804, 7-805, 7-806, 7-807, 7-810

that Petitioners Uber Technologies, Inc. (“Uber”), Grubhub Inc. (“Grubhub”), DoorDash, Inc.

(“DoorDash”), and Relay Delivery, Inc. (“Relay”) (collectively “Petitioners”) seek to enjoin in

related cases at Index Nos. 55943/2023, 155947/2023, and 155944/2023. The Minimum Pay Rule

sets forth the minimum payments third-party food delivery services and third-party courier

services (“apps”) must make to independent contractors they engage to perform deliveries in New

York City (“delivery workers”).

4. References to exhibits refer to those attached to the July 18, 2023 Affidavit

of Elizabeth Wagoner (“Wagoner Aff.”), including the report DCWP published concurrently with

the First Proposed Rule (“DCWP Report”) (Exhibit A), the December 2022 Hearing on the First

Proposed Rule (Exhibit C), the Statement of Basis and Purpose to the Second Proposed Rule

(“Second Rule SBP”) (Exhibit E), the April 7, 2023 Hearing on the Second Proposed Rule

(Exhibit F), and the Public Comments on Second Proposed Rule (Exhibit G), and the Statement

of Basis and Purpose to the Final Rule (“Final Rule SBP”) (Exhibit H).

5. The statements made in this affidavit are based on my personal knowledge,

review of records maintained by DCWP and the City of New York, communications with DCWP

staff, and upon statements made by employees, officers, and agents of the City of New York.

Overview of the Minimum Pay Rule

6. On June 12, 2023, DCWP adopted the Minimum Pay Rule, which sets forth

the minimum payments that apps must make to delivery workers. To accommodate the unique

features of work on the apps’ platforms, and the variety and sophistication of pay arrangements

present in the industry, the rule provides apps with more flexibility for businesses than any

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minimum pay law or rule with which I am familiar, including the minimum wage laws that

ordinarily apply to employees as well as the few sector-specific minimum pay laws that apply to

rideshare or delivery work. 1 For this reason, it is somewhat complex. However, the Minimum Pay

Rule is ultimately comprised of just two core elements: 1) a “Minimum Pay Rate,” established as

a specific dollars-per-hour figure in 7 R.C.N.Y. § 7-810(b), and 2) an option for apps to choose

between two formulas to translate this Minimum Pay Rate into the minimum amounts they must

pay to their delivery workers each week (the “Standard Method” and the “Alternative Method”).

These two formulas are established in 7 R.C.N.Y. § 7-810(b)-(d).

How Did DCWP Calculate the Minimum Pay Rate?

7. DCWP calculated the Minimum Pay Rate as the sum of three components:

a base pay component ($19.62), a workers’ compensation component ($1.68) and an expense

component ($2.26), which totals to $23.56. DCWP then applied a $3.60 reduction to account for

multi-apping, the practice of workers spending time simultaneously engaged in work for multiple

apps, reducing the rate to $19.96. Final Rule SBP at 2-3. The calculation is as follows:

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
= 𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 𝑃𝑃𝑃𝑃𝑃𝑃 ($19.62) + 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑠𝑠 ′ 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 ($1.68)
(eq. 1)
+ 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 ($2.26) − 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 ($3.60)
= $19.96

8. The $19.62 base pay component matches the current minimum payment

standard that applies to for-hire vehicle drivers in New York City under a rule promulgated by the

Taxi and Limousine Commission (“TLC”). 2 Second SBP at 5-7, Final Rule SBP at 8-9. DCWP

1
Existing minimum pay laws that apply to rideshare or delivery workers include California Proposition 22, the
Seattle App-Based Worker Minimum Pay Ordinance, and the New York City Taxi and Limousine Commission’s
Minimum Payment Standard for for-hire vehicle drivers.
2
The Minimum Pay Rule also draws on other features of the TLC minimum pay rule, including use of an industry-
wide utilization rate and a pay formula that seeks to compensate workers for the entire time that they are on an app,
including what the Minimum Pay Rule refers to as on-call time.

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adopted this rate so that, among other reasons, the City could set a consistent standard for

independent contractors working for apps in related industries. Id. This component comprises the

vast majority (83%) of the Minimum Pay Rate. 3

9. The $1.68 workers’ compensation component provides for supplemental

pay in lieu of the workers’ compensation benefits that are available to nearly all other workers in

New York State. Under New York law, employees are covered under traditional workers’

compensation insurance and for-hire vehicle drivers are covered under the Black Car Fund. 4

Second SBP at 7-8. The specific dollar amount was calculated to reflect the benefits delivery

workers would receive, as a percentage of payroll, if their apps classified them as employees

(7.84%). Id. The workers’ compensation component accounts for 7% of the Minimum Pay Rate. 5

10. The $2.26 expense component reflects the expenses of workers who

perform deliveries using electric bicycles. This consists of:

• vehicle depreciation ($0.32),

• casualty and theft loss ($0.05),

• batteries ($0.86),

• maintenance ($0.15),

• certain vehicle accessories ($0.26),

• phones ($0.35),

• and data plans ($0.27).

3
$19.62 / $23.56=83.27%
4
The Black Car Fund, created by a New York State statute (Chapter 49 of the Laws of 1999), is a non-profit
organization comprised of Member Bases and is funded by a passenger surcharge collected by the Member Bases and
remitted to the Fund. See https://www.nybcf.org/ (last accessed July 31, 2023).
5
$1.68 / $23.56=7.13%

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DCWP Report at 18; Final Rule SBP at 9. The expense component comprises 10% of the Minimum

Pay Rate. 6

11. The base pay, workers’ compensation, and expense components total to

$23.56. 7 Final Rule SBP at 3. To obtain the Minimum Pay Rate, DCWP then applied the multi-

apping adjustment to this total by multiplying $23.56 by 0.8471, obtaining a final Minimum Pay

Rate of $19.96. 8 Id. $19.96 is $3.60 less than $23.56. 9 This is a 15.29% reduction. 10

12. The multi-apping adjustment reflects DCWP’s study findings that workers

spent 82.3% (0.823) of their time connected to a single app; 17.7% (0.177) of their time connected

to more than one app; and that during their time connected to more than one app, they were

connected to 2.02 apps, on average. Id. at 10. As shown in equation 2, this means that for every

hour worked (i.e., hours a delivery worker is connected to at least one app), delivery workers

logged 1.19 hours of connected time, summing across all their apps. Or, in other words, the ratio

of working time to recorded time is 0.8471.

𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 (eq. 2)
1 1
= = = 0.8471
(1 × 0.823) + (2.02 × 0.177) 1.19

Id.

13. DCWP multiplied the $23.56 component subtotal by 0.8471 to calculate the

Minimum Pay Rate. Id. at 3. This converts the connected time recorded by apps into the

unduplicated work hours delivery workers actually worked. As used in this affidavit, “connected

time” is the sum of “trip time” and “on-call time,” as described in the next section.

6
$2.26 / $23.56=9.59%
7
$19.62 + $1.68 + 2.26=$23.56.
8
$23.56 x 0.8471=$19.96.
9
$23.56 – $19.96=$3.60.
10
$3.60 / $23.56=15.29%.

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14. The methods DCWP used to measure multi-apping are detailed in the

DCWP Report at 4-5. The rationale for the adjustment is discussed in the Second Rule SBP at 10-

11 and the Final Rule SBP at 10-11.

15. The Minimum Pay Rate phases in over two years. $19.96 is the full rate,

which takes effect on April 1, 2025. The rates for 2023 and April 1, 2024 are set as 90% and 95%

of the full rate ($17.96 and $18.96, respectively). See Final Rule SBP at 3, Table 2.

16. The rates for 2024, 2025 and subsequent years are also subject to an annual

inflation-adjustment to be performed by DCWP in accordance with the procedure specified in 6

R.C.N.Y. § 7-810(g)-(i). This will be performed administratively and posted on the DCWP

website, without additional rulemaking. 11 6 R.C.N.Y. § 7-810(h).

17. The details of how DCWP calculated the Minimum Pay Rate can be found

principally in the Final Rule SBP (at 3), the Second Rule SBP (at 4-5, Table 1), and the DCWP

Report (at 37, Table 15).

How Does Payment Work Under the Standard Method?

18. The Standard Method is one of the two ways an app can calculate minimum

pay. It is based on the hours of “trip time” and “on-call time” an app’s delivery workers work in a

weekly pay period. Trip time and on-call time are defined terms in the Minimum Pay Rule. Trip

time is the time between the moment a worker accepts an offer to perform a delivery, through the

moment the delivery is completed or cancelled. 6 R.C.N.Y. § 7-801(a)(7). On-call time is time that

a worker is connected to an app’s platform where they can receive or accept offers to perform

deliveries, excluding trip time. 6 R.C.N.Y. § 7-801(a)(4).

For example, DCWP will calculate the rate effective for 4/1/2025, as follows: Minimum Pay Rate 2025 = $19.96
11

x Inflation Factor, where the Inflation Factor reflects the percentage increase in prices between December 2022 and
December 2024, as measured by the Bureau of Labor Statistics for the New York City metro area.

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19. Under the Standard Method, an app must satisfy two requirements: an

“Individual Requirement,” specified in 6 R.C.N.Y. § 7-810(b)(1), and an “Aggregate

Requirement,” specified in 6 R.C.N.Y. § 7-810(b)(2).

20. The Individual Requirement sets the minimum amount that an app can pay

to an individual delivery worker for a week. This minimum amount is calculated as the Minimum

Pay Rate multiplied by the worker’s hours of trip time in the week. 6 R.C.N.Y. § 7-810(b)(1). As

an equation, this is as follows:

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑓𝑓𝑓𝑓𝑓𝑓 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐴𝐴
= 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 (eq. 3)
× 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐴𝐴′ 𝑠𝑠 𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻 𝑜𝑜𝑜𝑜 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇

21. The Aggregate Requirement sets the minimum amount that an app must pay

to all its delivery workers, together, for a week. This minimum amount is calculated as the

Minimum Pay Rate multiplied by the sum of all workers’ hours of trip time and on-call time in the

week. 6 R.C.N.Y. § 7-810(b)(2). As an equation, this is as follows:

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑃𝑃𝑃𝑃𝑃𝑃 𝑓𝑓𝑓𝑓𝑓𝑓 𝑎𝑎𝑎𝑎 𝐴𝐴𝐴𝐴𝑝𝑝′ 𝑠𝑠 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊
= 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
(eq. 4)
× (𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻 𝑜𝑜𝑜𝑜 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑏𝑏𝑏𝑏 𝑡𝑡ℎ𝑒𝑒 𝐴𝐴𝐴𝐴𝑝𝑝′ 𝑠𝑠 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊
+ 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝐻𝐻𝑜𝑜𝑢𝑢𝑢𝑢𝑢𝑢 𝑜𝑜𝑜𝑜 𝑂𝑂𝑂𝑂-call 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑏𝑏𝑏𝑏 𝑡𝑡ℎ𝑒𝑒 𝐴𝐴𝐴𝐴𝑝𝑝′ 𝑠𝑠 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊)

22. This means that average pay will always be greater than or equal to the

Minimum Pay Rate when calculated over all hours worked, including both trip-time and on-call

time.

23. Example: Consider a weekly pay period that begins on August 14, 2023,

when the Minimum Pay Rate is $17.96. Suppose 5,000 delivery workers, in aggregate, engage in

60,000 hours of trip time and 40,000 hours of on-call time for Uber in that week. Further suppose

that these totals include Delivery Worker A, who individually engages in 30 hours of trip time and

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20 hours of on-call time for Uber in that week. This 60/40 breakdown of trip time and on-call time,

both for Delivery Worker A and Uber’s delivery workers as a whole, is representative of what

DCWP found in the data apps provided to DCWP during the study. Final Rule SBP at 6. If Uber

chooses the Standard Method, it must pay Delivery Worker A at least $538.80 for that week and

must pay all its delivery workers, in aggregate, at least $1,796,000 for that week. This follows

from the formulas given above:

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑓𝑓𝑓𝑓𝑓𝑓 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐴𝐴 = $17.96 × 30 = $538.80 (eq. 5)

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑃𝑃𝑃𝑃𝑃𝑃 𝑓𝑓𝑓𝑓𝑓𝑓 𝑈𝑈𝑈𝑈𝑈𝑈𝑟𝑟 ′ 𝑠𝑠 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊
= $17.96 × (60,000 + 40,000) (eq. 6)
= $1,796,000

24. Currently, Uber, DoorDash, and Grubhub pay workers per delivery at rates

that vary with each offer, and do not compensate workers based on the on-call hours they

personally log in a week, which can also vary. The Standard Method allows apps to continue these

practices. Continuing the example, under the Standard Method, Uber might pay Delivery Worker

A $1,000 for the deliveries Delivery Worker A completes in the week, and the rest of its workforce

$1,795,000 for the deliveries they complete in the week. Since $1,000 is greater than $538.80,

Uber has complied with the Individual Requirement in respect to Delivery Worker A (see equation

4, above). Since the sum of $1,000 and $1,795,000 is $1,796,000, Uber has complied with the

Aggregate Requirement (see equation 5, above).

25. In this example. Delivery Worker A’s pay for the week is $20.00 per hour

worked, including all trip time and on-call time. 12 This is more than the Minimum Pay Rate for

2023 of $17.96. Another worker could make less than $17.96, and this would still be allowable

12
$1,000 / (30 + 20)=$20.00

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under the rule. Because of the Aggregate Requirement, if Uber pays one delivery worker less, it

must pay other delivery workers more, so that average pay still meets or exceeds the Minimum

Pay Rate. Alternatively, Uber could also choose to replicate Relay’s pay structure, and pay all

workers a regular rate of $17.96 for all their trip time and on-call time. This would also be

allowable under the Standard Method.

26. DCWP discussed its rationale for this method, including the flexibility it

provides to apps, in the DCWP Report at 31-32, the Second SBP at 11, and Final Rule SBP at 8.

In summary, the Individual Requirement protects each worker against the risk of exceptionally

low pay in any week, and the Aggregate Requirement ensures that average pay, across an app’s

workforce, is adequate, regardless of what compensation schemes apps experiment with or the mix

of trip time and on-call on their platforms.

How Does Payment Work Under the Alternative Method?

27. The Alternative Method is the second of two ways an app can calculate

minimum pay. It is based only on the hours of trip time an individual delivery worker works in a

weekly pay period. Under the Alternative Method, the minimum amount that an app can pay to an

individual delivery worker is calculated by multiplying an “alternative minimum pay rate” by the

delivery worker’s hours of trip time. 6 R.C.N.Y. § 7-810(c). Expressed as an equation, this is as

follows:

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑓𝑓𝑓𝑓𝑓𝑓 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐴𝐴
= 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 (eq. 7)
× 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐴𝐴′ 𝑠𝑠 𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻 𝑜𝑜𝑜𝑜 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇

28. The Alternative Minimum Pay Rate is calculated by dividing the Minimum

Pay Rate by 60%. Id. (Below, I explain why DCWP used 60% here.)

𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 = (eq. 8)
0.60

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29. Dividing a rate by a percentage less than 100 percent, increases that rate.

Thus, this calculation is also approximately the same as multiplying the Minimum Pay Rate by

1.67. 13

30. On or after April 1, 2024, an app must have a weekly utilization rate across

all its workers of at least 53% to be eligible to use the Alternative Method. This “low-utilization

floor” is explained infra in a dedicated section.

31. Similar to the Standard Method, an app that chooses the Alternative Method

has flexibility in how it designs its pay structure. An app can pay each worker a uniform regular

rate for their trip time, pay workers per completed delivery, or use any other compensation scheme.

All the Alternative Method requires is that at the end of the week, the app pays each worker at

least the amount obtained by multiplying the Alternative Minimum Pay Rate by their hours of trip

time.

32. Example: Consider the same Delivery Worker A, described above. In the

week that begins August 14, 2023, Delivery Worker A performs 30 hours of trip time and 20 hours

of on-call time for Uber, and is one of 5,000 delivery workers who performed 60,000 hours of trip

time and 40,000 hours of on-call time for Uber that week. As specified in the Minimum Pay Rule,

the Minimum Pay Rate is $17.96 for this period, and so the Alternative Minimum Pay Rate is

approximately $29.93. 14 If Uber chooses the Alternative Method, it must pay Delivery Worker A

at least $898.00 for that week:

13
1 / 0.60=1.6666…
14
$17.96 / 0.60=$29.9333

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𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑃𝑃𝑃𝑃𝑃𝑃 𝑓𝑓𝑓𝑓𝑓𝑓 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐴𝐴
$17.96 (eq. 9)
= × 30 = $898.00
0.60

33. In this example, if Uber pays the minimum of $898.00 to Delivery Worker

A, this works out to be the same as the Minimum Pay Rate (i.e., $17.96 per hour) when calculated

over all of Delivery Worker A’s 50 hours, including trip time and on-call time. 15 And if Uber pays

each of its 5,000 delivery workers at the Alternative Minimum Pay Rate for their trip hours, this

works out to average pay of $17.96 over all hours worked, including trip time and on-call time. 16

Why Would an App Choose the Alternative Method Over the Standard Method, or Vice
Versa?
34. The Standard Method and Alternative Method are both designed so that

delivery workers, on average, are paid at or above the Minimum Pay Rate when calculated over

all hours of work, including both trip time and on-call time. One method is not better than the other

for workers, because one method does not necessarily result in more money for workers than the

other.

35. An app may be attracted to the Alternative Method because, as long as its

utilization rate is above the 53% low-utilization floor, its labor costs are not affected by the amount

of on-call time workers choose to spend on its platform. This means that an app can establish

relatively liberal rules on platform access, which allows for natural fluctuations in the amount of

on-call time workers experience week-to-week, while still only paying for trip time.

36. Conversely, an app with utilization above 60% is more likely to use the

Standard Method because it will save money. Substituting different breakdowns of trip time and

on-call time into the above example shows why. Imagine the same 5,000 food delivery workers,

15
$898.00 / 50=$17.96.
16
(($17.96 / 0.60) x 60,000) / (60,000 + 40,000)=$17.96

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except that, in aggregate, they engage in 75,000 hours of trip time and 25,000 hours of on-call time

for Uber. This is a utilization rate of 75%. 17 If Uber used the Standard Method, it would owe

$1,796,000 to its whole workforce. 18 If Uber used the Alternative Method, paying the Alternative

Minimum Pay Rate only for trip time, it would owe $2,245,000. 19 Uber saves $449,000 in this

example by using the Standard Method. 20

37. These examples also show how any app can save money on labor costs by

controlling the amount of on-call time on its platform. Although DCWP assumes Relay is more

likely to use the Standard Method and Uber, DoorDash, and Grubhub are more likely to choose

the Alternative Method, any app can change its method in any week. If an app wishes to control

its costs and can keep on-call hours low, the Standard Method is more attractive. If an app instead

values on-call time and more open platform access, as Uber, DoorDash, and Grubhub state that

they do, the Alternative Method may be the better choice. This is, in part, how these alternatives

give the apps flexibility.

38. The Minimum Pay Rule also allows apps to select which method to use at

the end of the pay period, after the work has been performed. This enables an app to choose

whichever method will result in lower labor costs, based on the mix of trip time and on-call time

that occurred during the week. 6 R.C.N.Y. § 7-810(c)(1) (An app “that chooses the alternative

method for a pay period must document its utilization rate and choice of method no later than when

payment is due[.]”). Typical minimum pay regimes do not provide businesses this degree of

flexibility.

17
75,000 / (75,000 + 25,000=75%.
18
$17.96 x 100,000=$1,796,000.
19
75000 x $17.96 / 0.60=$2,245,000.
20
$2,245,000 - $1,796,000=$449,000.

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Why Did DCWP Use a 60% Utilization Rate in the Alternative Minimum Pay Rate
Calculation?
39. DCWP used 60% in its Alternative Minimum Pay Rate calculation because

this is the average “utilization rate” that DCWP identified in data from Uber, DoorDash, and

Grubhub that DCWP received during the study. Second SBP at 4, 12; Final SBP at 4, 6-7. The

utilization rate is the amount of trip time workers engage in for an app, divided by the sum of trip

time and on-call time. Id. In other words, it is the percentage of time that workers spend on trips.

Its use in the Alternative Minimum Pay Rate calculation means that, on average, workers will

receive pay that is appropriate, considering all their trip and on-call hours. This is illustrated by

the example of Delivery Worker A under the Alternative Method, discussed above. See example,

supra ¶33. In that example, trip time was 60% of Delivery Worker A’s time on the Uber platform,

and on-call time was 40% of Delivery Worker A’s time. This 60/40 breakdown tracks the averages

DCWP found across all apps – 60% of worker time is trip time and 40% is on-call time. So, in that

example, Delivery Worker A’s pay under the Alternative Method came out to exactly $17.96 – the

full amount of the 2023 Minimum Pay Rate – when calculated over all Delivery Worker A’s trip

time and on-call time. Id. If trip time had been greater than 60%, Delivery Workers A’s pay would

have been more than $17.96 when calculated over all trip and on-call time. If trip time had been

less than 60%, Delivery Worker A’s pay would have been less than $17.96 when calculated over

all trip and on-call time. This is the same design used by the TLC to determine minimum payments

to for-hire vehicle drivers. DCWP Report at 32, Second SBP at 12-13.

How Did DCWP Calculate the 60% Utilization Rate?

40. To calculate the 60% utilization rate factor in the Alternative Method,

DCWP used data from Uber, DoorDash, and Grubhub for the 18-month period from January 1,

2021 through June 30, 2022. Final Rule SBP at 6. This was the date range of the data these apps

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provided for the study. Id. DCWP excluded Relay from this calculation because it is unlikely to

choose the Alternative Method, and because inclusion of Relay would have slightly increased the

utilization rate and corresponding low-utilization floor, making it less reflective of the operating

models of Uber, DoorDash, and Grubhub that the Alternative Method seeks to accommodate. Final

Rule SBP at 6-7.

41. To perform the calculation, DCWP took the following steps. First, DCWP

combined the data reflecting trip-time and on-call time from Uber, DoorDash, and Grubhub. Id.

Then, DCWP calculated their combined utilization rates for each week in the 18-month period. Id.

DCWP published these weekly utilization numbers on its website. 21 Id. Below is the formula

DCWP used to calculate the combined weekly utilization rates:

𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡
𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 = (eq. 10)
(𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 + 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑜𝑜𝑜𝑜-call 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡)

Id.

42. Then, DCWP calculated the average of these weekly utilization rates over

this 18-month period. Id. This resulted in the 60% number. Id.

43. In addition to publishing weekly utilization rate numbers on its website,

DCWP also published the quarterly utilization rate numbers in Table 4 of the Final Rule SBP. Id.

44. DCWP responded to several comments from Uber, DoorDash, and Grubhub

about the use of the 60% figure in the Final Rule SBP at pages 5-7. These apps take issue with

how DCWP uses 60% in the Alternative Method, but do not challenge the accuracy of the

calculation.

The weekly utilization data is available at: https://www.nyc.gov/assets/dca/downloads/pdf/workers/Weekly-
21

Utilization-Data-Delivery-Apps.pdf

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Why Did DCWP Require that Apps Have at Least 53% Utilization to Use the Alternative
Method?
45. On or after April 1, 2024, an app must have a weekly utilization rate across

all its workers of at least 53% to be eligible to use the Alternative Method. This means that in the

week the app wishes to use the Alternative Method, trip time must account for at least 53% of the

total trip time and on-call time on its platform that week. Id. This is the “low-utilization floor.”

This requirement is necessary because if an app has excessive amounts of on-call time, the

Alternative Method would fail to pay workers adequately for all their work hours, including both

trip time and on-call time. In other words, the pay for trip time would not be enough to make up

for the large amount of uncompensated on-call time.

46. Example: Substituting different numbers into the “Uber” examples above

show why it is important to set a low-utilization floor to protect workers from low pay and avoid

giving a competitive advantage to apps that use the Alternative Method. Imagine 5,000 food

delivery workers working 100,000 hours, except that, in aggregate, they engage in 40,000 hours

of trip time and 60,000 hours of on-call time for Uber. This is a utilization rate of 40%. 22 If the

Minimum Pay Rule allowed Uber to use the Alternative Method with a 40% utilization rate –

which it does not, except during a grace period prior to April 1, 2024 – then the app would pay

only $1,197,333.33 for these 100,000 hours, producing average worker pay of only $11.97 when

calculated over all trip time and on-call time. 23 Permitting an app to use the Alternative Method in

spite of low utilization would also undercut competitors like Relay, because it would give a

competitive advantage to an app that keeps workers waiting excessively with no pay, rather than

to an app like Relay that uses workers’ time efficiently by minimizing on-call time.

22
40,000 / 100,00=40%.
23
$1,197,333.33 / 100,000=$11.97.

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How Did DCWP Calculate a 53% Low-Utilization Floor for the Alternative Method?

47. First, DCWP calculated the standard deviation of Uber’s weekly utilization

rates, Grubhub’s weekly utilization rates, and DoorDash’s weekly utilization rates over the January

1, 2021 to June 30, 2022 period. Standard deviation is a common statistic used to describe variation

within a set of numbers. It describes how far each value typically lies from the mean. As applied

here, it describes how far an app’s weekly utilization rates tended to be from the apps’ mean weekly

utilization rate over the January 1, 2021 to June 30, 2022 period.

48. Then, using these standard deviations, DCWP compared the variation in

weekly utilization rates at each app. The app with the median variation had a standard deviation

of 7% in its weekly utilization rates. Id. This means that this app’s weekly utilization rate tended

to be 7% higher or lower than its mean utilization rate over the January 1, 2021 to June 30, 2022

period. This also means that one app had higher variation in its weekly utilization rates, and another

app had lower variation in its weekly utilization rates. Each app required DCWP to sign

confidentiality agreements before they would produce any data. Thus, DCWP cannot identify here

which apps had which weekly utilization rates. 24

49. Finally, DCWP subtracted 7% from the 60% mean utilization, yielding the

53% low-utilization floor. Id.

50. The purpose of setting a low-utilization floor at this level was to lead apps

to maintain average utilization rates around 60% and provide for greater consistency in utilization

rates than they have previously, while still allowing for some natural variation week to week. Final

Rule SBP at 7.

24
DCWP can provide the Court with this information under seal if the Court wishes to see it.

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Why Did DCWP Add a “Safe Harbor” to the Final Rule for Apps that Use the Alternative
Minimum Pay Rate, and How Does it Work?

51. In the Second Proposed Rule, there was no exception to the 53%

requirement effective April 1, 2024, meaning that, under no circumstances could an app use the

Alternative Method if its utilization rate was under 53% in a week. Under the Final Rule, apps are

allowed to use the Alternative Method in two weeks that they have utilization below 53% in any

year (measured between April 1 and March 31), but for the remainder of the year may not use the

Alternative Method for any weeks in which their utilization is below 53%. This relaxation of the

low-utilization floor provides apps with additional room to accommodate occasional unexpected

variation in their utilization rates without undermining the purpose of the low-utilization floor,

which, as discussed above, is to ensure workers have adequate opportunities to pick up trips to

earn income and do not spend excessive time on-call waiting for trip offers.

52. The “safe harbor” in the Final Rule is a modified version of the “safe

harbor” proposed by DoorDash. Final Rule SBP at 7.

How Does the Version of the Alternative Method Adopted by DCWP Compare to the Version
Proposed by Uber, DoorDash, and Grubhub?
53. During the rulemaking process, Uber, Grubhub, and DoorDash urged that

the Alternative Method be revised to rely instead on a lower Alternative Minimum Pay Rate that

accounts only for a subset of delivery workers’ on-call time. Uber recommended calculating the

Alternative Minimum Pay Rate using an 87% utilization rate, and Grubhub and DoorDash

recommended using a 1.156 multiplier; each of these calculations produces approximately the

same result. Final Rule SBP at 4. Under this proposal, the Minimum Pay Rule’s $17.96 Minimum

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Pay Rate for 2023 translates to $12.46 per hour when calculated over all hours worked, including

both trip time and on-call time. 25 The multiplier in the Minimum Pay Rule is 1.67. Supra ¶24.

54. It can be helpful to think of the multiplier as describing, for each hour of

work, how many minutes a delivery worker should be paid. A multiplier of 1.156 means that if a

worker performs 30 minutes of trip time and 30 minutes of on-call time, then only 4.7 minutes of

on-call time are paid, and the remaining 25.3 minutes of on-call time are unpaid. In contrast, under

the version of the Alternative Method adopted by DCWP, all time is paid, albeit indirectly, except

for the 15.29% reduction for multi-apping time, as discussed supra.

55. DCWP determined this was the appropriate policy, in consideration of “the

on-call and work hours of food delivery workers [and] the adequacy of food delivery worker

income considered in relation to trip-related expenses.” Admin. Code § 20-1522(a)(3). DCWP

detailed these reasons on pages 11-12 of the Second SBP, on pages 4-5 and pages 10-12 of the

Final Rule SBP, and in DCWP’s opposition brief. In summary, adopting Uber, DoorDash, and

Grubhub’s proposal would make workers’ pay too low, would not create parity with the TLC rate,

and would exclude increments of workers’ time that financially benefit the apps and which workers

cannot, practically, use for their own benefit. Id.

56. Comments and testimony delivery workers submitted during the

rulemaking process show that they spend on-call time waiting for delivery offers, experience this

time as work, and believe it should be compensated. Dozens of workers described long, unpaid

wait times for delivery offers, resulting in low hourly pay over a full day of work, as described in

the next section.

25
$17.96 x 1.156 x 0.60=$12.46.

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57. Although the apps argue that delivery workers use on-call time to run

personal errands or perform other non-work, see, e.g., GrubHub/DoorDash Petition at 47-48, there

is no data, and at best slim testimonial evidence supporting that hypothesis, and overwhelming

evidence that delivery workers are on-call waiting for income-generating delivery offers, to the

apps’ benefit. The best indicator DCWP has of the amount of on-call time that workers must

engage in as part of their work for the apps is the amount of on-call time they actually engage in.

Despite DCWP’s extensive study and rulemaking, it did not encounter evidence supporting Uber,

DoorDash, or Grubhub’s speculation that delivery workers spend a material amount of time on-

call for purposes other than making a living.

What Did Delivery Workers Say About On-Call Time in Rulemaking?

58. Below is a sample of

Case Info

Judge

Nicholas Moyne Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

August 01, 2023

Case Filing Date

July 06, 2023

County

Parties

CHAMPION, ANNE MARIE Attorney for the Plaintiff
DoorDash, Inc. Plaintiff
Grubhub Inc. Plaintiff
HASPEL, LEESA NICOLE Attorney for the Plaintiff
HERRMANN, GABRIEL Attorney for the Plaintiff
MURRAY, EDWARD LOUIS Attorney for the Defendant
New York City Department of Consumer and Worker Protection Defendant
SCHNEIDER, JORDAN Attorney for the Defendant
SELVIN, KAREN BETH Attorney for the Defendant
Vilda Vera Mayuga , in her official capacity as Commissioner of the New York City Department of Consumer and Worker Protection Defendant
EDWARD WIPPER Attorneys for Plaintiffs
KAREN DUNCAN Attorneys for Plaintiffs
ADAM COHEN Attorneys for Plaintiffs

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