New York City is regulating the delivery industry with new government watchdog agency

New York City mayor Eric Adams announced last week in his annual State of the City address that the city would be creating a watchdog agency to regulate the booming delivery industry. The Department of Sustainable Delivery would be the first of its kind of the nation and would be designated to protect both delivery drivers and consumers.

Although Adams did not give many details on how the agency would work, essentially it would address the issues raised by the surge of delivery drivers on bikes and mopeds across the city in part by overseeing inspections and registration for e-bike drivers.

One of the issues the agency would address is the danger of lithium-ion batteries, which are often used to power electric bikes and scooters and can cause explosions and fires if not used properly. According to CBS News, 18 people died in New York City in 2023 as a result of lithium-ion battery explosions.

“New Yorkers have been clear: We welcome the future of transit and mobility, but we cannot have mopeds speeding down our sidewalks, delivery apps exploiting workers, or chaos on our streets,” Adams said in a statement. “Our streets — and how they’re used — have changed, and we’re changing with them. The Department of Sustainable Delivery will be a first-in-the-nation way to let us retake the reins of our streets and ensure that the next generation of mobility innovation works for our workers, our neighbors, and our city, as we continue to deliver on our vision to protect public safety, rebuild our economy, and make this city more livable for working-class New Yorkers.”

This is not the first time in recent years that New York City has tried to crack down on the delivery industry. In 2021, the city passed a set of bills to protect couriers and delivery drivers, which let delivery drivers start to set parameters for their own routes, including maximum distance they’re all to travel to make their deliveries and the right to use the restrooms of the restaurants they’re delivering food for. The following year, those worker protections were expanded to include such guidelines and rules as letting drivers choose their own routes, getting paid at least once a week, and being provided with insulated bags for six or more deliveries.

Most recently, New York City passed a minimum wage law for delivery workers that would require app-based food delivery platforms to pay their delivery workers $19.96 per hour, or almost triple the previous $7.09 average rate. Under the legislation, apps can choose whether to pay their employees hourly, or only for trip time. For the latter option, these companies would have to pay approximately 55 cents per minute, which adds up to $33 an hour -- more than double the city’s current minimum wage rate for other workers.

Although delivery platforms tried to challenge this law in court, their appeal was denied, and the new minimum wage law was upheld by the Appellate Division of the New York State Supreme Court in December. The minimum wage has currently been increased to $17.96 per hour, and will creep up to $19.96 an hour when the law takes full effect in 2025.

Contact Joanna at [email protected]