Instacart is hitting New York City customers with a “regulatory response fee” — prompted by the city's new minimum wage rule for grocery delivery workers.

The new fee marks the latest escalation in the battle between delivery apps and the City Council. City leaders have sought to protect gig economy workers by establishing rules around pay and tipping.

Still, delivery service giants argue the rules drive up costs for consumers, hurt small businesses that see fewer orders placed through the apps and ultimately cost the same delivery workers pay.

Instacart’s new fee — which came to $5.99 on an order Gothamist punched into the app this week — is yet another instance of “drip pricing,” said Vicki Morwitz, a professor of business and marketing at Columbia Business School.

Critics argue that the back-end charges, which they call "junk fees," hide the true costs from consumers. By the time a customer sees those kinds of charges, Morwitz said, they’ve already made their selections.

“It makes them more likely to buy [and] more likely to buy more expensive items,” she said. “And even when they see the total at the end, they're unlikely to undo the deal.”

Calling these costs something like a “regulator response fee,” Morwitz added, “also makes them sound like a tax …  I don't think your average consumer understands that that is the company passing on increased costs.”

Several new regulations went into effect Monday, including one that requires grocery delivery apps to pay workers at least $21.44 an hour, not including tips, according to the city’s Department of Consumer and Worker Protection.

This matches a rate that the Council set in 2023 for food delivery workers, like those working for DoorDash or Uber Eats. City leaders have framed the changes as necessary to address low pay and unpredictable earnings.

Grocery and food delivery app companies alike must also now present customers with the option to tip workers during checkout, with a default rate of at least 10% preselected.

The city had previously accused Uber and DoorDash of costing workers more than $550 million by putting the option to tip later in the ordering process.

Judges last week rejected separate requests — one from Uber Eats and DoorDash, another from Instacart — to stop the laws from going into effect.

Passing the costs of these sorts of policies onto consumers is nothing new: DoorDash also charges a $1.99 “NYC Regulatory Response Fee” at checkout, which the app describes as “a result of NYC’s minimum pay regulations.”

A spokesperson for Uber confirmed the company had also folded a similar charge into its pricing when the city passed earlier regulations regarding driver pay.

Instacart said in a December blog post that the new regulation was the result of a “rushed, flawed and politicized process that fundamentally ignored how grocery delivery actually works.”

It said the new rules would limit the number of workers who could be on the road at any time.

“For months, we raised clear, data-backed concerns that the policy would increase grocery delivery costs for New Yorkers, but those warnings were repeatedly ignored,” Thomas McNeil, Instacart’s government affairs senior manager, said in a statement this week.

He confirmed the new fee was a direct response to the minimum wage regulations.

Recently, policymakers have been targeting similar pricing structures, saying they hide costs from consumers.

Under the Biden administration, the Federal Trade Commission passed a rule requiring ticket sellers, hotels and rental platforms to disclose fees up front.

Earlier this month, Mayor Zohran Mamdani, who counts Biden’s former trade commission chair among his advisers, also announced his own crackdown on hotel junk fees.

Even when such fees are regulated, companies may still try to pass costs onto consumers by increasing overall prices, but in that case, the consumer is more informed, Morwitz said.

“ I think it's important that consumers know upfront how much they're going to be paying … versus being affected by this kind of presentation.”

A spokesperson for the Department of Consumer and Worker Protection said it was looking into the issue of Instacart’s new fee.