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DoorDash will pay $131.5 million to settle allegations it underpaid delivery workers in New York City, the largest settlement for delivery workers anywhere in the US.
Getting into it: Mayor Zohran Mamdani and the city’s Department of Consumer and Worker Protection (DCWP) announced the deal Tuesday. Roughly $115 million goes to about 264,000 workers, with a median payout of around $48, and the company accepted a $16.7 million civil fine. Most of the money, about $83 million, resolves a fight over how to calculate pay for time drivers spend logged into the app between deliveries, while $12.3 million makes up for pay that never came through or landed days or weeks behind schedule.
“When a worker earns a wage, they deserve to be paid that wage — not tomorrow, not after a lawsuit, but on time and in full,” Mamdani said. “For years, DoorDash failed to count every hour worked by delivery workers,” he added, accusing the company of using “greedy algorithms” to get around the law. “This was not a rounding error or an accidental mistake.”
DoorDash took responsibility while disputing the characterization. “Simply put, we screwed up. Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren’t intentional, that doesn’t make them okay,” the company said. It blamed technical bugs, incomplete banking information from drivers, and complicated deliveries that crossed city lines or were canceled partway through. Of the $12.3 million, it said $6.6 million never made it to drivers at all, while the other $5.7 million came in late.
On the larger on-call portion, DoorDash said it calculated that time differently than the city and believed its method was “fair, practical, and legal,” but chose to pay out rather than fight for years.
Workers do not need to file anything to receive their settlement. The city used DoorDash’s own records to figure out who’s owed money and how much, and a settlement administrator will email affected drivers in late October. On top of back pay, workers will receive damages worth twice what they were owed.
The case traces back to a 2023 rule, established under former Mayor Eric Adams, setting a minimum pay rate for app-based delivery workers that now stands at $22.13 an hour. Separately, in January, the DCWP accused DoorDash and Uber Eats of using “design tricks” that cost workers more than $550 million in tips, with average tips dropping from $3.66 an order to 93 cents within a week of the December 2023 changes.
