New York City has raised its minimum wage for app-based delivery drivers, which has garnered mixed reactions from stakeholders.

According to a report by The Street on June 12, beginning July 12 the hourly wage will go from an average of $7 to $17.96. The report added that the average wage is expected to go up another $2 to $19.96 by 2025.

New York City Mayor Eric Adams said during the announcement, "This new minimum pay rate will guarantee these workers, and their families, can earn a living. They should not be delivering food to your household, if they can’t put food on the plate in their household.”

This move will make it more expensive for Uber and DoorDash to run their business but reflects how crucial drivers are in this part of the restaurant industry. The decision has been praised by those advocating for fair labor practices, but concerns have been raised by app-based platforms due to economic feasibility and the impact on operations. There have been ongoing discussions about the gig economy and workers’ rights regarding fair compensation.

Companies like Uber have expressed reservations about the implications of the wage increase. Concerns have been raised about the possibility of job losses, a reduction in tips and increased pressure on drivers as companies try to manage the increased costs due to higher wages.

The decision by New York City is a potential model for other cities, highlighting the importance for fair wages and treatment of gig workers who provide essential services. This wage increase also gives credit to the delivery drivers who face adverse weather conditions and challenging work environments for their customers.

The wage increase is expected to have a variety of effects on the local economy and the long-term effects of the wage hike and the effects on workers and companies will be closely monitored.