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UBER Delivery Workers in New York to See Improved Conditions

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Uber Technologies’ (UBER - Free Report) delivery workers in New York are expected to soon get minimum pay and see improved working conditions as lawmakers pass a sweeping legislation to regulate the delivery industry. The move, which recognizes the efforts of delivery workers to meet the spike in demand during the pandemic and the challenging conditions through which they carried out deliveries during the floods caused by Hurricane Ida, concerns Grubhub, owned by Just Eat (GRUB - Free Report) , and DoorDash (DASH - Free Report) , which dominate the industry apart from Uber. While Uber and DoorDash carry a Zacks Rank #3 (Hold), Just Eat carries a Zacks Rank #4 (Sell). 

Some of the protections offered in the series of bills passed on Thursday include the ability of workers to set the maximum distance they are willing to travel per trip, the option to not accept trips over bridges or in tunnels, the companies disclosing gratuity policies to workers, and restaurants allowing couriers to use their bathrooms when a delivery is being picked up. The bills prohibit food delivery apps from charging couriers for the payment of their wages, and they must pay delivery workers at least once a week. In order to determine the minimum payment required per trip, the Department of Consumer and Worker Protection is required to conduct a study on food delivery workers.

While Uber has not yet commented, a CNBC report quoted a DoorDash spokesperson saying, “We recognize the unique challenges facing delivery workers in New York City and share the goal of identifying policies that will help Dashers and workers like them.” The spokesperson added, “We will continue to work with all stakeholders, including the City Council, to identify ways to support all delivery workers in New York City without unintended consequences.”

Supporting the bills, a Grubhub spokesperson, Grant Klinzman, told CNBC, “These bills are common-sense steps to support the delivery workers who work hard every day for New York’s restaurants and residents.” Klinzman added, “Ensuring they receive a living wage and have access to restrooms isn’t just a good idea - it’s the right thing to do.”

Efforts have been ongoing to protect gig workers and offer them more benefits. Last month, a California court ruled that Proposition 22 (Prop 22), a ballot initiative that allowed gig companies, including Uber, to retain the independent contractor status for their drivers, was unconstitutional. While retaining the independent contractor status, Prop 22 provides workers with a number of benefits, including a certain amount of guaranteed earnings, a healthcare stipend and accident insurance for on-the-job injuries.

A Key Pick

A top-ranked stock in the Internet - Services industry is Shopify (SHOP - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Shopify have rallied more than 30% so far this year.