New York City's minimum pay rule for delivery drivers caused a massive 82% collapse in available work hours.
April 26, 2026
Original Paper
The Floor Works, But Platforms Substitute: Industry-Aggregate Evidence on the NYC Food Delivery Minimum Pay Rule, 2022-2025 Working Paper
SSRN · 6644599
AI-generated illustration
The Takeaway
Delivery platforms responded to mandated wage increases by slashing on-call hours and changing user interfaces to discourage tipping. While the hourly rate for drivers went up, their total income often suffered because the apps shifted costs back onto the workers. The platforms used algorithmic and interface tweaks to transfer 554 million dollars away from the labor force. This regulatory substitution game shows how tech companies can bypass new laws by changing the digital environment. A simple wage floor is often defeated by the flexibility of the platform economy.
From the abstract
New York City's minimum pay rule for app-based restaurant delivery workers, effective December 4, 2023, raised industry-aggregate hourly pay from $5.05 in the last full pre-rule quarter to $21.49 by the end of 2025, with two scheduled cost-of-living adjustments along the way. Using the Department of Consumer and Worker Protection's public quarterly tables covering all six covered platforms across sixteen quarters, this paper documents that the floor itself worked, but platforms substituted along