Instacart employee Eric Cohn, 34, heads to his car outside a Safeway grocery store while wearing a respirator mask to help protect himself and slow the spread of the coronavirus disease (COVID-19) in Tucson, Arizona, U.S., April 4, 2020. Picture taken April 4, 2020. REUTERS/Cheney Orr

By Jonathan Stempel

NEW YORK, Dec 2 (Reuters) - Instacart sued New York City on Tuesday, seeking to block enforcement of five laws affecting the grocery delivery company, including higher minimum pay for app-based workers and greater disclosures to customers about tipping.

According to a complaint filed in Manhattan federal court, Congress forbade state and local governments from regulating prices and services for customers using platforms such as Instacart, while New York's state legislature "has long taken charge" of minimum pay standards.

Instacart, based in San Francisco, also said the U.S. Constitution prevents states and cities from discriminating against commerce by out-of-state companies.

The laws are scheduled to take effect on January 26, Instacart noted, saying an injunction was needed to prevent higher delivery costs that would harm consumers and grocers.

Minimum pay for grocery delivery workers would match the $21.44 per hour that restaurant delivery workers already receive.

"This legal challenge is about standing up for fairness, for the independence that tens of thousands of New York grocery delivery workers rely on, and for affordable access to groceries for the people who need it most," Instacart said in a blog post.

CITY SAYS WORKERS DESERVE BETTER

The defendants also include the New York City Department of Consumer and Worker Protection.

"App-based grocery delivery workers, like all workers, deserve fair and dignified compensation for their labor, and it is disappointing that Instacart disagrees," the department said in a statement.

"Instacart shoppers are currently paid just $13 per hour, with no benefits, no pay for waiting time, and no reimbursement for vehicle expenses," the department added. "No business in New York could legally compensate employees at such a low level. These workers deserve better."

Instacart is the trade name for publicly traded Maplebear. It had no immediate reaction to the city's comment.

MAYOR VETOED MINIMUM PAY LAW

The lawsuit targets Local Law 124, which sets the higher minimum pay for grocery delivery workers, and Local Law 107, which requires consumers to get options to tip at least 10% of the purchase price or manually enter what to tip.

Instacart also challenged laws requiring additional recordkeeping and disclosures.

New York City provided more legal rights to restaurant delivery workers after business surged during the pandemic.

"Instacart’s business depends on the flexibility, independence, and convenience that its platform offers," the complaint said. "The local laws will degrade that business."

Absent an injunction, "Instacart will be forced to restructure its platform, restrict shoppers’ access to work, disrupt relationships with consumers and retailers, and suffer constitutional injuries with no adequate legal remedy," the complaint added.

Mayor Eric Adams opposed the minimum pay law, which the New York City Council passed over his veto in September, and did not sign the tipping law.

(Reporting by Jonathan Stempel in New YorkEditing by Rod Nickel and David Gregorio)