Delivery companies have reportedly lost their bid to halt New York City\u2019s new tipping law.<\/p>\n
Uber<\/a> and DoorDash<\/a> had asked a judge for an injunction to block the new law, which requires food delivery apps to offer customers the option to tip delivery workers, Reuters reported<\/a> Friday (Jan. 23).<\/p>\n According to the report, U.S. District Judge George Daniels in Manhattan said the companies did not demonstrate a clear likelihood of succeeding on their claims that the laws, including a requirement that they recommend a minimum tip of 10%, violated their First Amendment rights to free speech.<\/p>\n DoorDash and Uber sued to block<\/a> the law last month. It requires platforms such as theirs to ask customers to tip during checkout rather than delivery and to display suggested tip amounts.<\/p>\n \u201cA reminder to tip is a courtesy, a forced solicitation of a tip may as well be a tax,\u201d DoorDash wrote in a blog post announcing the litigation.<\/p>\n The company argued that tipping remains voluntary under the law, but that the requirement to ask for it at checkout amounts to \u201cpressure\u201d on customers.<\/p>\n Advertisement: Scroll to Continue<\/p>\n A separate report<\/a> by the website Gothamist noted that the new law is due to go into effect Monday (Jan. 26). The report added that city regulators recently alleged that Uber and DoorDash had cost delivery workers more than $550 million after altering their apps\u2019 interfaces in order to dissuade customers from tipping.<\/p>\n A DoorDash spokesperson told the publication that the company would \u201clikely see an immediate drop-off in orders for New York\u2019s small businesses\u201d when the legislation goes into effect.<\/p>\n \u201cWe\u2019re disappointed in this ruling, but are confident in our position and will continue working to prevent further losses for local businesses and higher costs for consumers,\u201d DoorDash spokesperson Samantha Ramirez said.<\/p>\n The new law is happening amid ongoing unease among members of the Labor Economy<\/a>, which PYMNTS has defined as the \u201croughly 60 million U.S. employees who earn about $25 an hour or less and form the on-the-ground workforce that keeps production, distribution and service delivery running.\u201d<\/p>\n Recent PYMNTS Intelligence research finds that Labor Economy sentiment has remained stuck<\/a> even when the economy appears better on paper. The research also shows a continued gap in confidence relative to non-Labor Economy workers, fueled by weaker views on saving, debt and job mobility.<\/p>\n