Instacart Is Suing New York City over Its $22.13 Minimum Wage for Delivery Drivers

The economic fallout of the law has been significant. Is it even legal?

In recent years, several large progressive cities have begun pushing aggressive minimum wage policies for food delivery and rideshare. The results have been predictable: A decline in the number of gig tasks being performed, an increase in prices for consumers, and a reduction in drivers as platforms restrict access to aspiring gig workers.

But in addition to the economic fallout, these policies also may run afoul of the law. In response to New York City's recent expansion of its delivery driver minimum wage, the gig company Instacart has sued the city. Instacart's lawsuit argues that NYC's minimum wage ordinance is preempted by federal law—an argument that, if it prevails, could send shock waves through progressive city councils across the country.

In 2023, NYC became the first city in America to pass a minimum wage for delivery drivers. The ordinance set the minimum wage for drivers at $19.96 per hour, which has now risen to $22.13. Last year, New York's city council overrode a veto by former Mayor Eric Adams to expand the minimum wage law from restaurant delivery drivers to also include grocery deliverers. The grocery delivery wage, which went into effect in January of this year, drew an immediate legal challenge from Instacart.

Continue reading the entire piece here at Reason

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C. Jarrett Dieterle is a legal policy fellow for the Manhattan Institute.