From Monday, food delivery workers will get minimum hourly pay. Here’s why it matters

Starting Monday, August 17, on-demand food delivery drivers in Australia will see a significant shift in their working conditions, thanks to a new minimum standards order issued by the Fair Work Commission. The directive mandates that delivery drivers earn a minimum of $31.30 per hour, with higher rates for those using motorbikes ($31.80) and cars ($32). These changes come after years of advocacy by the Transport Workers’ Union (TWU) and mark a pivotal moment in the regulation of gig work in the country. The new standards apply to "employee-like" workers who operate through digital on-demand delivery platforms such as Uber Eats and DoorDash. These workers, who primarily deliver food, beverages, liquor, and supermarket groceries, will now be entitled to a guaranteed minimum hourly rate for their "engaged time", defined as the period between accepting an order and completing the delivery. This includes time spent waiting for an order at a restaurant, provided the driver has already accepted it. However, it excludes time spent waiting for jobs to appear on the app. The order also introduces mechanisms for dispute resolution and provides workers with the right to take unpaid time away from work. Platforms are required to establish feedback forums where drivers can raise concerns about their work conditions. If issues remain unresolved, workers can escalate disputes directly to the Fair Work Commission. Additionally, delivery platforms must ensure that all workers have access to personal accident insurance, while drivers are responsible for obtaining and maintaining their own compulsory third-party insurance for their vehicles. The agreement follows nearly two years of negotiations between the TWU and the two major delivery platforms. The union, which initially filed for the minimum standards order in 2024, has hailed the outcome as "world-leading." TWU national secretary Michael Kaine emphasized that the new protections represent a turning point for gig workers, who have long campaigned for better conditions and fairer treatment within the industry. Employment and Workplace Relations Minister Amanda Rishworth has also endorsed the changes, calling them a "big step" toward ensuring that delivery workers can enjoy both flexibility and fairer protections. She noted that the reforms allow workers to avoid the dilemma of choosing between flexibility and security, a common concern in the gig economy. The implementation of the new standards comes amid growing scrutiny of the gig economy, particularly following reports of unsafe working conditions and inconsistent pay. According to the TWU, there have been at least 23 fatalities involving gig workers since 2017. These incidents have underscored the need for stronger regulations and protections for workers who often operate under precarious conditions. The new order also addresses gaps left by previous legislation. In 2024, the Albanese government introduced the Closing Loopholes reforms, aimed at extending some protections to gig workers. As part of these reforms, the Fair Work Commission gained the authority to issue legally binding minimum standards orders. This move was intended to close legal loopholes that previously allowed platforms to classify workers as independent contractors rather than employees, thereby exempting them from traditional labor laws. DoorDash's head of public policy for the Asia-Pacific region, Maggie Lloyd, described the new standards as a "defining moment" for Australia's on-demand economy. She stated that the agreement demonstrates how strong worker protections can coexist with the flexibility valued by delivery workers. The changes are expected to affect hundreds of thousands of delivery workers nationwide. Over the next few weeks, platforms will begin adjusting their systems to comply with the new requirements, including recalculating earnings and ensuring that all workers receive the mandated minimum pay. The impact of these changes on the overall cost of food deliveries remains to be seen, though industry experts suggest that platforms may absorb some of the increased costs to maintain competitiveness. The new standards also introduce a mechanism for topping up earnings if a worker's pay falls below the earnings floor during a 21-day period. This ensures that even in times of lower demand or fewer orders, workers still receive a minimum income. However, the system does not account for time spent waiting for jobs to appear on the app, which remains a contentious area for many drivers. With the new protections in place, the focus now shifts to monitoring compliance and addressing any challenges that arise during the transition. Industry stakeholders, including unions and delivery platforms, will continue to collaborate to ensure that the new standards are effectively implemented and that workers benefit from the improved conditions.