A new law in December guarantees fair compensation for 65,000 gig workers in New York City, who are essential for food delivery services. The minimum wage law forces food-delivery apps, like DoorDash, Grubhub, and Uber Eats, to pay gig workers at least $17.96 an hour.
As a result of higher hourly wages, The New York Post obtained a memo from DoorDash informing NYC restaurants about new delivery fee hikes.
The memo explained customer fees will rise "to help offset the increased costs." However, there was no mention of how much.
Food-industry insiders told NYPost that DoorDash could add between $2 to $4 per order:
The result: A typical dinner that's delivered in New York City — whether it's a burger, a chicken burrito or a plain cheese pizza — is likely to get $4 pricier, on average.
A DoorDash spokesperson confirmed to the newspaper about the increase in delivery fees but declined to comment on a specific amount:
"We have made clear from the start that we planned to introduce fees when the new minimum pay rate was first introduced."
The spokesperson said the fees will be introduced in the "coming weeks."
The memo also stated that DoorDash's maximum commission per order will be raised from 20% to 23% for delivery orders and 5% to 8% for pick-up orders.
Uber Eats and Grubhub have also warned that the minimum wage law will result in higher prices for consumers.
"All options are being considered, including changes that may negatively impact small restaurants, as we try and adapt to the city's poorly thought out rule," an UberEats spokesman told NYPost.
NYC is one of many places where minimum-wage laws are being introduced and about to increase takeout food prices.
In Los Angeles, the owner of four Fatburger franchises said menu prices will have to be hiked and employee hours trimmed in anticipation of a new minimum wage of $20 per hour in April.
And two large Pizza Hut operators in the Golden State laid off all their delivery drivers ahead of a new minimum-wage law.
Food inflation is here to stay.
