On Tuesday, Instacart filed a lawsuit against New York City, aiming to prevent the implementation of five laws that would impact grocery delivery services. This includes regulations on minimum pay for app-based workers and requirements for transparency regarding tips.
Instacart’s complaint, lodged in a federal court in Manhattan, points out that, while federal law restricts local governments from regulating the prices and services of platforms like Instacart, the state legislature has traditionally overseen minimum wage matters.
The company, based in San Francisco, also noted that the U.S. Constitution forbids states and municipalities from favoring local businesses over those from other states.
The contentious Local Law 124 mandates that grocery delivery workers receive the same minimum wage as their counterparts in the restaurant sector. This law is set to take effect on January 26, and Instacart argues that it would lead to increased delivery costs, negatively affecting consumers and grocers alike.
Instacart stated, “This legal challenge stands up for the fairness, independence that tens of thousands of New York grocery delivery workers depend on, and the access to affordable food for those who need it most.”
The New York City Department of Consumer and Worker Protection, one of the parties named in the lawsuit, had not provided any comment at the time.
Instacart operates under the trademark of publicly traded Maplebear.
Company claims law would harm Instacart’s operations
The lawsuit focuses on Local Law 124, which requires that grocery delivery services pay their workers the same minimum wage as those delivering for restaurants.
Additionally, Instacart opposes Local Law 107, which mandates that consumers either tip at least 10% of their purchase or manually input a tip amount. There are also several other laws aimed at increasing record-keeping and providing more information to customers.
Instacart contends that this law builds on prior legislation aimed at enhancing the rights of restaurant delivery workers, a sector that saw growth during the pandemic.
The complaint stressed that the company’s business model relies on the flexibility and independence of its platform. It argues that local regulations could diminish its operations.
Instacart further claimed that without a temporary restraining order, the changes could force the company to “re-platform,” reduce job opportunities for shoppers, disrupt connections between consumers and retailers, and encounter constitutional issues without sufficient legal recourse.
It’s worth noting that Mayor Eric Adams had previously expressed his opposition to the minimum wage law passed by the New York City Council in September, as well as refraining from signing the accompanying tipping law.
