Evaluating the Devastating Impacts of New York’s Extreme Minimum Pay Rate

New data from DoorDash shows wide-reaching impact in New York City due to haphazard city policymaking

2 min read
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The New York City minimum pay regulations for app-based food delivery workers went into effect in December 2023. Now, six months since the rule went into effect, we have a more complete picture of the damaging effects on New York’s economy – including huge losses in revenue for small businesses and fewer offers and earning opportunities for Dashers.

Devastating losses for small businesses

Delivery platforms provide an affordable and convenient opportunity for local restaurants to grow their business and reach new customers, especially in the post-pandemic economy. However, across the five boroughs small businesses that use these delivery services are experiencing devastating losses because of this policy, including 850K fewer orders and $17M less in revenue than they otherwise would have earned on the DoorDash Marketplace in just a recent two-month period alone. The picture for many of these businesses is bleak, as over the course of a year 5.6M orders in NYC might not be placed leading to over $110M in lost merchant sales.

Shuai Zhang owns POPRICE, a modern Chinese takeout restaurant in Queens, and says he is at risk of losing his business altogether.

“We had three restaurants last year and since September our delivery revenue is down more than 50%. Then we had to shut down two other locations. We were having a team of 25 including our own delivery drivers, a team of 25 employees, now we have only four employees left.”

Less earning potential for Dashers

The very workers these regulations were meant to help are also suffering. Fewer orders from New York City customers means less work for Dashers , along with longer wait times for orders and platform changes that unfortunately mean limiting the flexibility that many Dashers rely on.

It's clear that being a Dasher in New York City is simply not as appealing as it used to be for some. The number of new Dashers in New York City has fallen by 20% compared to before the new minimum pay rate took effect. A closer look by borough reveals even more troubling data.

May 2024 earnings standard map

William Lopez, a 55-year-old Puerto Rican born Queens resident, used to deliver on DoorDash to supplement his income, but now he feels the minimum pay rate has backfired on the delivery workers it was meant to help.

“Right now, with the new law I have lost so much money because I do not receive money like how I used to before. I used to be a Top Dasher, and now I can’t even become a Top Dasher, because I only make 14 deliveries a month...I don’t know what to do to tell you the truth.“

What’s next in New York City?

While the future for how these rules will continue to impact New York City seems uncertain, we are committed to continuing to work with local lawmakers, community advocates, and business organizations to find a solution that works for Dashers, merchants, and customers alike. Other cities that enacted similar harmful new rules are already taking note and looking to make changes to find a balance that works for everyone and we hope that policymakers in New York will recognize that this isn’t working, and we need to find a new approach.