Instacart Sues New York City Over New Worker Pay and Tipping Rules Instacart has filed a lawsuit against New York City, challenging a set of new laws set to take effect in late January that would increase pay for grocery delivery workers and mandate higher tipping options for customers. The legal move highlights the ongoing tension between gig economy platforms and local governments seeking to regulate worker conditions. The lawsuit targets five local laws, with two central points of contention. The first is Local Law 124, which would require grocery delivery workers to be paid a minimum wage equivalent to that of restaurant delivery workers in the city. The second is Local Law 107, which mandates that apps provide customers with a tipping option of at least ten percent or a field to manually enter a custom tip. Instacart argues the laws are unlawful and will ultimately harm the very people they intend to help. In a public statement, the company framed its lawsuit as a necessary defense. It claimed the laws threaten the independence of workers, could reduce their access to work opportunities, and would make groceries less affordable for consumers. The company warned it would be forced to restructure its platform and disrupt its relationships with shoppers, customers, and retail partners if forced to comply. The legal filing makes several specific claims. Instacart asserts that federal law prevents state and local governments from regulating the prices set on digital platforms like its own. It also argues that minimum pay regulation falls under the authority of New York State, not the city, and alleges the rules unconstitutionally discriminate against out-of-state companies. The new regulations come amid broader scrutiny of gig worker pay and benefits. Instacart’s opposition mirrors tactics used by other technology companies facing regulations that impact their business models, often presenting legal challenges as fights for consumer choice and worker flexibility. The financial stakes for Instacart’s leadership are personal. The company’s CEO, Chris Rogers, has an estimated net worth of at least 28.6 million dollars. His predecessor, Fidji Simo, now a board chair at Instacart and an executive at OpenAI, is reportedly worth approximately 72.7 million dollars. Their substantial personal wealth contrasts with the company’s argument that the new pay rules would be catastrophic, leading to suggestions that such individuals could theoretically help offset new costs, though the lawsuit seeks to avoid them entirely. The laws are scheduled to take effect on January 26, setting a short timeline for the court to address Instacart’s challenge. The outcome will be closely watched as a signal of how far cities can go in regulating the pay and working conditions within the app-based delivery sector.
