The Legal World of Food Delivery

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REPORT

I. EXECUTIVE SUMMARY

New York City has seen an explosion of food delivery since the pandemic – and the pell-mell growth of the industry seems to have been matched only by the pace of efforts to regulate it. News headlines and social media feeds are constantly crowded with questions like these:

• How best to protect the economic and physical safety of the estimated 65,000 food delivery couriers, many of them immigrants – popularly known as deliveristas – who deliver the meals by bicycle?
• What role should the government play in ordering the economic relationship among the app companies, the restaurants, and the food delivery couriers – and protecting the legitimate economic interests of each?
• Given the surge in meal deliveries, how can all New Yorkers – food delivery couriers, pedestrians, and drivers alike – best be kept safe from traffic crashes?
• How best to reduce the incidence of deadly fires caused by e-bike batteries?
• What are the right roles for each of the federal, state and city governments, and for self-regulation by the private sector?

Hardly a week goes by, it seems, without some new legislation, regulatory proposal, or court decision. Just in the last few months as this report was being finalized:

• the Mayor’s Office proposed giving oversight responsibility to a brand-new Office of Sustainable Delivery;
• agencies of the City of New York raided and shut down a Queens shop that allegedly was functioning as an illegal “battery factory”, while an exploding lithium-ion battery (the kind typically used in e-bikes) was cited by the New York City Fire Department (FDNY) as the likely cause of a devastating fire in Brooklyn, and the Sanitation Department noted an alarming rise in fires in its trucks caused by lithium-ion batteries being disposed of improperly;
• a pedestrian in Manhattan was killed after being struck by an e-bike;
• app companies adjusted their tipping policies, following an Appellate Division ruling that upheld a decision allowing new minimum wage requirements for delivery workers to go forward; and
• the New York State Legislature moved forward on a package of bills that “would set quality standards for batteries that power the [e-bike] devices, and require that e-bike shops carry sufficient fire-fighting equipment such as Class B extinguishers,” with a number of the bills signed into law by Governor Hochul.
• The New York City Council held a hearing on a package of bills that would make app delivery companies responsible for various health and safety violations by delivery couriers;

If history is any guide, even these developments no doubt will become “old news,” superseded by many others, in the weeks and months ahead.

This report is an effort – the first we are aware of – to step above the daily fray and ask broadly: how did we get here, what is the current factual and regulatory context, and how generally should government and the legal system approach these issues going forward?  It would be a fool’s errand for this bar association to try and recommend specific legal solutions to all the many pending controversies. Rather, the value we hope to add is to propose a general framework that policymakers and stakeholders can look to – a sort of legal “lightbox,” which stakeholders can use to illuminate particular proposals as these issues evolve.

As for how we got here: New Yorkers have always loved to eat, and they have always loved to eat home-delivered food. But how did yesterday’s amusing passion morph into today’s public-policy crisis? As one commentator notes:

For many decades, New Yorkers ordered food on telephones, calling in their orders from takeout menus pinned to their refrigerators. The menus were, inevitably, from nearby restaurants. The delivery worker, employed by the actual restaurant, arrived on a conventional bicycle. Bicycle delivery worked; there was no expectation that the food had to arrive in an absurdly quick time frame from very far away.

What changed was an only-in-New-York convergence of law, technology, public health, and market demand. A key step occurred when the New York State Legislature and the City Council of New York City both legalized e-bikes in 2020. This step responded to years of advocacy from environmentalists who favored e-bikes as a green technology, and from advocates who sought to bring out of the regulatory shadows the already-existing market in bicycle meal delivery, largely by immigrants.

Market demand was a key factor as well. Even before the pandemic, food delivery nationally was already growing at 7% to 8% a year – double the growth rate of the restaurant business as a whole, “with millennials and Gen Zers preferring the convenience of prepared meals.” COVID-19 put the trend on steroids. With multiple food delivery apps suddenly on every smartphone, and New Yorkers locked down in their homes, demand for home-delivered restaurant meals surged off the charts.

Gone were the days of depending just on the corner deli or neighborhood restaurant. Suddenly it seemed to be an essential part of the New York City experience to have every cuisine on the planet available for immediate home delivery, even from distant restaurants. Food delivery couriers became essential workers. An image of a delivery worker pedaling through the floods of Hurricane Ida went viral in 2021. This iconic moment drove home the new importance of this service to New Yorkers – and the growing need for thoughtful public policy responses.

A few metrics capture the scope of the change. In the first month of the pandemic alone, the major meal delivery app companies grew a stunning 162% over the previous year. According to the Wall Street Journal, New York City restaurant sales were about $25 billion from March 2021 to May 2022, with app deliveries accounting for 15% of that total; delivery workers suffered nearly three dozen traffic fatalities from 2020 to 2023 and were also the cause of many accidents involving others. E-bike battery fires surged from just 30 in 2019 to almost 270 in 2023, becoming a leading cause of fire and fire-related death in the city.

It is hardly surprising that government actors have rushed in good faith to try and bring order out of this chaos. Now, however, the pandemic is in the rearview – but the surge in food delivery has persisted, and so have all of the legal and public policy issues that came with it. Short-term crises deserve short-term responses; fundamental changes deserve a more considered approach.

When considering the next generation of legal changes around food delivery, policymakers and stakeholders would do well to hit pause and ask these five questions:

1. What keeps New Yorkers safe? There is no higher priority than protecting life and limb. The rise in fires, fire-related deaths, and traffic fatalities and injuries is deeply disturbing. No amount of quickly delivered pad thai can justify these tragedies. All legal and regulatory efforts should ask, first and foremost, what will best reduce the numbers of deaths and injuries.
2. What protects the food delivery couriers in the long haul? A host of legal reforms over the last several years have focused on bringing immediate improvements in the lives of the food delivery couriers – everything from minimum wage requirements, to mandatory bathroom access, to City-created rest hubs and charging stations. Useful short-term steps like these only scratch the surface of the larger problem of how to help this massive group of essential workers fully climb the ladder of opportunity in New York City. Legal and regulatory efforts should aim not just at short-term patches but at a future state where food delivery couriers and their families are full participants in the New York experience: employed, educated, housed, and integrated fully into the fabric of the city.
3. What helps the private sector thrive? New Yorkers depend on their restaurants, and now depend by the millions on food delivery apps. These businesses employ, and serve, New Yorkers by the millions. They deserve a legal environment that is clear and predictable; does not impose new regulatory burdens by the minute; and allows them to earn a reasonable return. Consumers, too, deserve regulations that protect and promote a business sector that New Yorkers now depend on so heavily – including, for example, regulations that take account of possible impacts on pricing for end users.
4. What is the best use of public resources? Solutions like the City-created rest hubs have an immediate appeal. But like any use of public dollars and public spaces, they raise the question: Which problems should be handled by government, and which are properly handled by private-sector stakeholders at their own expense? We are agnostic on the answer, but strongly in favor of that question always being asked.
5. What causes effective change? New York now has several years of experience with a host of legal reforms around food delivery. In considering the next generation of legal change, legislators and regulators should be asking what has actually worked so far, and what has not.

We hope these principles, and this report, are useful to policymakers, to stakeholders and to the general public.

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