Deceitful delivery?

A new report claims that Grubhub knowingly schemed to cheat its couriers out of minimum wage.

According to Streetsblog, in 2024, the popular food delivery service began outsourcing a percentage of its orders to Relay, another delivery app exempt from NYC delivery-app minimum-wage requirements.

Starting in 2024, if you ordered delivery from Grubhub, your food courier would have legally been making over $19 an hour. However, according to Streetsblog, the person who brought you the goods was more than likely working for Relay and making just over $13 an hour, citing court filings. According to Grubhub, drivers make more than that per hour when tips are factored in.

Job sites like Indeed and Glassdoor say that drivers earn an average wage of $28.02.

Streetblog maintains that this tactic was implemented to circumvent NYC’s worker protection laws.

An internal email sent to Grubhub’s tech workers and obtained by Streetsblog states:

“The partnership [with Relay] arises primarily to stem elevated driver pay costs in NYC, which have more than doubled since the new driver pay law was introduced.”

Passed in 2021, the aforementioned law forces app companies to pay their workers a guaranteed hourly rate.

The law initially required companies to pay delivery workers $17.96 an hour, which was raised to $19.96 in April 2025 and is now $21.44 per hour. This wage will continue to be adjusted annually for inflation.

This wage is intended to support and protect drivers who operate as private contractors and lack employee benefits such as health insurance or workers’ compensation.

Predictably, and with draconian flair, DoorDash, Uber and Grubhub sued the city in an unsuccessful bid to stop the law.

However, Relay’s business model was deemed distinct enough for a judge to grant an injunction allowing the company to ignore the law, creating a legal loophole.

During this time, Grubhub was accused of kicking some drivers off the app without explanation. One blocked driver told Streetsblog they subsequently joined Relay, which paid its private contractors just $13.35 per hour, meaning they did the same work for considerably less pay.

To add insult to financial injustice, Relay workers were sent on longer trips, further violating the city’s worker protection laws.

In the partnership between Grubhub and Relay, according to former Grubhub employees, 20% to 30% of orders were outsourced to Relay, reported Streetsblog, which also cited an internal Grubhub email saying it expected to save 39% on the cost of each order sent to Relay, amounting to around $5 million annually.

“Grubhub wanted to use Relay because they wouldn’t have to pay for the workers’ time. Since Relay was not subject to the pay standard, they could take advantage of free labor that way,” New School economist James Parrott, who helped write the minimum pay standard law, told Streetsblog. “It’s a pretty obvious move to sidetrack the pay requirement.”

Within months of the 2024 purchase of Relay, Grubhub laid off 20% of its workforce, with the company shuttering Relay in NYC, leaving thousands of delivery workers out of work.

In a statement to Streetsblog, Grubhub stated it was “looking for ways to diversify its courier network amid NYC’s changing regulatory environment,” adding that the decision “helped Grubhub absorb spikes in volume and control for variable costs while we faced merchant fee caps, new courier pay requirements, and other challenges that made it difficult to operate sustainably in the City.”

In addition, a spokesperson told the site, “While others in the industry responded by targeting tipping, we sought reasonable and practical solutions that didn’t suppress courier pay. Today, our focus remains being the best partners we can be to couriers, restaurants, and the City.”

Recently, Grubhub began a three-month test program that will deliver food by drone to customers in New Jersey.

The program uses Dexa’s DE-2020, a fully automated delivery aircraft designed to transport goods directly to customers’ homes, presumably putting even more couriers out of work.