Food-delivery companies DoorDash (DASH) - Get DoorDash Report, Uber Eats (UBER) - Get Uber Technologies, Inc. Report, and Grubhub (GRUB) - Get Grubhub, Inc. Report fell after New York City passed legislation to tighten regulation on the industry and boost delivery workers' rights.
The measures require restaurants to grant couriers access to bathrooms. They set minimum per-trip payments as well as a guarantee that couriers receive full tips. And they allow the workers to set limits on their routes, reports say.
The apps will also be required to pay their delivery people once a week. The companies must offer payment options for workers who don't have bank accounts.
And the services are prohibited from charging fees to workers to receive their earnings, Bloomberg reported.
“Delivery workers have worked tirelessly throughout this pandemic risking their lives, their livelihoods,” said Councilwoman Carlina Rivera, a prime sponsor of the bills, according to Bloomberg.
At last check Grubhub shares were down 3.8% to $15.63 while Uber shares were off 1.3% to $44.90 and DoorDash shares were down 1.3% to $214.27.
Some 65,000 food-delivery drivers work in New York. They were named essential workers during the height of the Covid-19 pandemic.
Classified as independent contractors, the workers don't have access to minimum wage or overtime benefits.
Last week, DoorDash sued New York City over a new law requiring the food-delivery companies to share customer data with restaurants. DoorDash argued that the law violates customer privacy.
That lawsuit, filed in federal court in Manhattan, was the second brought by the company in less than a week.
The prior week, Uber and Grubhub joined the company in filing a lawsuit against the city over a law that would license them and cap the commissions they can charge restaurants.
The companies petitioned the federal court in New York to issue an injunction preventing the city from enforcing the fee cap. The New York City Council approved the cap in August.