From Monday, an Uber or Doordash delivery driver in Australia will earn at least $31.30 an hour – a milestone for gig economy workers who have struggled with low pay and lack of protections for over a decade.

The union hailed its deal with DoorDash and Uber Eats – the two organistions that control most of Australia’s food delivery market – as a “world first”.

Considering Australia’s industrial umpire, the Fair Work Commission, pretty much stuck to the proposed conditions it was handed, are gig economy workers really going to get a better deal? And is the price of your takeaway food about to go up?

What does it mean for workers?

The new minimum standards applies to any gig worker that performs on-demand delivery of food, drinks, or groceries.

The standards include new dispute processes, new feedback mechanisms, representation rights and personal injury insurance for injured workers.

The headline item is arguably the “safety net” minimum pay rates for gig workers, who will initially receive hourly rates ranging from $31.30 – if you’re on a bike – to $32 if you’re driving a car.

The minimum rates will increase by 50 cents from 1 January 2027.

But the safety net is different to a “minimum wage” in the way you may typically think of one.

Companies like UberEats won’t have to start paying drivers an hourly rate; gig workers will continue to be paid according to each trip, based on factors including time, distance and other promotional bonuses the delivery companies use as incentives.

Instead, the companies will be required to ensure workers’ average pay doesn’t fall below the minimum rate. To do this, delivery platforms will need to calculate a worker’s total earnings over a 21-day period.

If they have paid someone on average less than the earnings floor of $31.30 and $32 for their “engaged” time – more on this later –the platform will have to top up their earnings to meet it.

The TWU says in the past workers have been paid as little as $14 an hour and, importantly, the new rules do not cap how much people can earn.

Will delivery drivers be paid more?

Longtime delivery driver and rider Alexi Edwards says her pay will “definitely” go up as a result of the order.

“Since it came out that $32 per active hour was on the table, I’ve been tracking the numbers and I’ll be $100 to $200 better off per week,” she says.

Edwards, who has worked for UberEats, DoorDash and the now defunct Menulog, says workers will be entitled to the minimum rate from the time they accept a job to the time they drop it off, which includes time waiting at the restaurant or retailer.

“It’s a really good step in the right direction,” she says. “It shows these foreign Silicon Valley tech companies that this is not the US. We have standards here and we have rights here.”

Helen, a delivery driver in Melbourne who asked not to use her last name, is also optimistic. She says she has worked for both UberEats and DoorDash over the past four years and her hourly rate can sometimes work out to less than $20.

Shane Millsom, the secretary of the advocacy group Rideshare Driver Network, is much less positive.

He says the minimum standards are simply “codifying the existing business model” and that delivery platforms will continue to pay workers according to an “incredibly complex” and seemingly arbitrary system.

Workers will not be compensated for time spent waiting between jobs. The minimum pay rate only applies to “engaged” time, and there are a lot of provisions allowing the delivery companies to dictate when someone is considered engaged or not.

As Millsom points out, $31.30 is less than the casual minimum wage of $33.05 per hour.

Will my takeaway be more expensive?

In 2023, when the Albanese government was introducing workplace laws which included empowering the industrial umpire to set minimum standards for gig workers, delivery platforms and business groups strongly pushed back, claiming the cost of meal delivery would increase exorbitantly.

The companies have changed their tune considerably since the reforms were first floated.

On Thursday, a DoorDash spokesperson said the company was not planning to change customer prices.

“The current rates in the order have been set at a level we believe is sustainable, and we’ll look to operational efficiencies elsewhere in the business,” they said.

UberEats’ managing director, Ed Kitchen, said similar: “We will be focusing on driving operational efficiencies rather than defaulting to increasing delivery or merchant fees.”

The workplace relations expert Prof Alex Veen says the pushback of a few years ago is “reflective of a particular style of political lobbying” that uses “quite hyperbolic language”.

Given that the TWU and major platforms began negotiating the standards three years ago, Veen says the delivery companies may already have begun factoring in any additional costs.

“I don’t think we’ll see an instant hike in the cost of delivery processes,” he says. “It’s not as if this is falling out of the sky.”

What does it mean for other gig workers?

Overall, Veen says it remains to be seen how these changes will make a difference to the lived experience of workers. The FWC could approve future minimum standards orders more quickly, now that the commission has gone through the process once.

The TWU already has two applications for other industries before the FWC. If the commission approves them, they would respectively set standards for workers in the rideshare and “last-mile delivery” sectors. The latter refers to parcel delivery for companies such as Amazon.

The TWU national secretary, Michael Kaine, says the union is “deep in discussions” for what “decent” conditions for workers in the two sectors look like.

“These standards, like in food delivery, have the potential to be life-changing for workers.”

Could this set a precedent for other countries?

Similar discontent is bubbling in other countries between gig workers and the tech companies that employ them.

In most US states, independent contractors are not entitled to wage and labor protections guaranteed to employees.

In India, where the gig economy is forecast to grow to 23.5 million in 2029-30, some labor groups organised a strike on New Year’s Eve to demand a minimum monthly income for every gig worker.

In the UK, protections for Uber drivers guaranteeing them at least the national living wage does not extend to UberEats couriers.

On the other hand, the European Union has adopted a directive that requires digital platforms to treat gig workers as employees unless they can prove otherwise. The member states have until December this year to adopt the new rules into their legislation.