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MANHATTAN (CN) — Grocery delivery app Instacart has lost another bid to halt a fresh New York City law that extends minimum wage requirements for food delivery drivers to grocery deliverers, too.
It’s a requirement Instacart says will cause “irreparable harm” to the company if it’s allowed to stand. The app’s parent company Maplebear Inc. sued New York City in December to prevent the new regulation from taking effect, but it lost a preliminary injunction motion to freeze the pay requirement.
On Monday night, the company lost another bid to ice the law — this time while it appeals the previous ruling to the Second Circuit. In a brief five-page order, U.S. District Judge John Koeltl found Instacart failed to show a likelihood it will succeed on its impending appeal.
“Instacart insists that it is nonetheless entitled to an injunction pending appeal because it has identified ‘complex … constitutional issues’ and there is the ‘possibility that part of all of [the Court’s] decision may be reversed on appeal,’” the Bill Clinton appointee wrote.
But that’s not enough to stay his previous order.
“Instacart must show that there is a substantial possibility of success on appeal, which it has not done,” Koeltl added.
In a statement to Courthouse News, a spokesperson for Instacart said the judge “misunderstood the applicable law and facts, which do not permit the city to impose these onerous and inflexible regulations.”
“Instacart will continue its lawsuit and remains committed to opposing unlawful legislation that reduces flexibility for shoppers, increases costs and limits grocery delivery access for the communities we serve,” the spokesperson said.
In Instacart’s initial lawsuit — filed Dec. 2, 2025, in the Southern District of New York — the grocery delivery and pickup service tried to distance itself from food delivery apps like DoorDash and Uber Eats, which were contesting the new delivery laws in their own right. Instacart claimed the city council did not have grocery delivery apps in mind when it passed the new increased minimum hourly wage for drivers of $21.44.
The app claims that, unlike food delivery drivers on other platforms, its grocery service employs personal shoppers made up mostly of women, caregivers and people who work on a part-time basis. They are paid a base “batch” rate based on estimated time and effort for each particular order.
If the company is forced to comply with the new minimum wage rule, Instacart claims it will be have to “overhaul its platform and business model in the city” by limiting the windows during which personal shoppers can go online and take orders, capping the number of shoppers online at any given time and requiring them to accept most or all requests.
“Instacart’s business depends on the flexibility, independence and convenience that its platform offers,” the app claims in the complaint. “But the local laws will degrade that business and harm precisely what has made Instacart successful.”
Koeltl rejected the company’s move for a preliminary injunction in January. He wasn’t persuaded by Instacart’s claim that the citywide laws are preempted by the Federal Aviation Administration Authorization Act, which restricts states from regulating the activities or pay of “motor carriers,” whether that be for food delivery apps or large-scale shipping.
“The prices that motor carriers charge intermediaries for their labor, rather than customers and consumers for their transportation services, is simply not what Congress intended to preempt with the FAAAA,” the judge found.
The new minimum wage law kicked in Jan. 26. Since then, Instacart has imposed a new $5.99 fee labeled a “Regulatory Response Fee” for Big Apple customers.
DoorDash and Uber Eats are embroiled in their own lawsuit against the city over new delivery app regulations. In that case, they’re fighting a rule requiring users to have the option to tip drivers at checkout, rather than after they place or receive their orders. The default tip is automatically set to a minimum of 10%.
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