Last month, New York City’s strengthened delivery worker protection laws finally took effect. After years of organizing and advocacy, delivery workers are now guaranteed a minimum pay rate of $21.44 an hour and the opportunity to earn tips before customers checkout. These are fair, common-sense updates designed to honor the dignity of grueling work and protect the tens of thousands of delivery drivers who make our city run.
Unfortunately, Instacart’s response was to slap a new “regulatory response fee” on every order placed in the city and then blame the city and its very own workers for it.
This extra fee of $5.99 is a choice. And it’s a familiar one, especially from a multi-billion dollar company that increasingly thinks it can reach into its customers’ wallets to pad its own profits. This brazen profit-seeking is even more outrageous as we come off Super Bowl Sunday, where Instacart reportedly spent $7 million dollars to fund a star-studded 30 second TV ad, leaving many workers wondering how they can spend over $230,000 per second, but not $21 for a decent hourly wage. This is the same exploitative playbook we’ve come to expect from large corporations. Instead of course correcting, they undermine basic public interest legislation by raising costs on the backs of customers and workers. New Yorkers shouldn’t stand for it.
The city’s delivery worker protection laws were implemented because companies offering app-based delivery services built lucrative empires on poverty wages and unpredictable pay that left workers struggling to survive. We should all be extremely proud of the steps our city has taken in recent years to correct this imbalance and go to bat for working-class New Yorkers. Nowhere in our worker protection laws does it say that companies like Instacart must institute new surcharges. Our laws require basic fairness and protection for the drivers who make same-day deliveries possible.
Instacart’s response is especially damning considering what we learned about the company’s pricing tactics last year. A bombshell report from the economic think tank Groundwork Collaborative revealed Instacart had been charging different shoppers different prices, even though they were shopping for identical items at the same time at the same store – costing families as much as $1,200 a year in additional fees. Forced to end this scheme amid immense public scrutiny, it appears Instacart is now using New York City to test drive a new junk fee to boost its profits.
Calling this a “regulatory response fee” is a deliberate attempt to shift blame and gaslight customers. It suggests that the city’s efforts to bolster worker protections are to blame for rising costs. The reality is that Instacart is putting its bottom line over the people responsible for its success.
This matters because New Yorkers, like all Americans, are facing intense financial pressure. Grocery prices remain high. Housing costs are out of control. Consumer and medical debt is soaring. Families everywhere are cutting back wherever they can. Surprise or hidden junk fees like Instacart’s don’t just nickel-and-dime consumers, they cost U.S. households billions of dollars a year and continue to contribute to our national affordability crisis.
There’s no reason why New Yorkers should have to choose between worker protections and lower prices. They can and deserve to have both. The question is whether massive corporations will continue their deceptive junk fee crusade, or if they will prioritize fairness, honesty, and transparency.
As a city, we’ve seen this tactic before. When we passed paid sick leave, corporations warned of price hikes and job losses that never materialized. When we raised the minimum wage, we heard the same threats of businesses fleeing. Yet, each time, the sky didn’t fall. And each time, workers were better off.
Perhaps what’s new now is the speed and creativity at which app-based companies come up with sneaky ways to impose junk fees – buried in the checkout screens, hidden behind vague language, and nearly impossible to detect across all the digital platforms we use in our daily lives. That’s what makes strong enforcement just as important as the laws we have on the books.
In the roughly one month since taking office, Mayor Zohran Mamdani and DCWP Commissioner Sam Levine have been laser-focused on driving down costs for consumers and strengthening worker protections by targeting junk fees and working to hold corporations accountable for ripping people off. At a time when federal consumer protection agencies have been gutted, this campaign to address affordability and worker protection at the local level is imperative.
We must continue to ensure DCWP has the resources, tools, and authority it needs to scrutinize deceptive corporate practices, ensure compliance with local regulations, and protect New Yorkers from junk fees and other shady pricing tactics. When businesses like Instacart openly attempt to undermine our worker protection laws, the city must be willing to step up quickly and decisively with meaningful action and consequences.
New York’s delivery drivers are essential to our local economy. Fair pay, basic decency, and strong consumer and worker protections should not be sacrificed as a cost of doing business. Instacart can afford to do the right thing. It’s time to stop pretending otherwise.
Sandy Nurse is a City Council member who represents the 37th Council District based in Brooklyn. Lorelei Salas is former commissioner of the NYC Department of Consumer and Worker Protection and the former supervision director at the U.S. Consumer Financial Protection Bureau.