DoorDash agrees to $131.5m settlement over underpaid New York workers
DoorDash will provide nearly $115 million in relief to roughly 264,000 delivery workers, known as Dashers, with a median payout of about $48 per worker
DoorDash has agreed to pay $131.5 million to resolve a New York City government investigation into allegations that it underpaid food delivery workers and delayed their earnings, city officials said.
Mayor Zohran Mamdani described the agreement as the city's largest labor enforcement action to date, aimed at holding food delivery platforms accountable to a 2023 city law designed to improve pay standards, says the Guardian.
DoorDash will provide nearly $115 million in relief to roughly 264,000 delivery workers, known as Dashers, with a median payout of about $48 per worker.
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Of the settlement, $83 million will go toward resolving disputes over how pay was calculated for workers who were logged into the app but waiting for deliveries. Another $12.3 million will compensate workers for payments that were missed or delivered days to weeks late.
DoorDash will also pay the city a $16.7 million civil fine.
Mamdani criticised DoorDash for using "greedy algorithms" and failing to count every hour worked by delivery personnel. He said the underpayments were neither an accidental mistake nor a rounding error.
The agreement follows accusations raised nearly eight months earlier by the Department of Consumer and Worker Protection, which alleged that DoorDash and Uber Eats used "design tricks" to deprive workers of more than $550 million in tips.
DoorDash acknowledged the failures in a statement.
"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 OK"
The company attributed the pay discrepancies to complex delivery scenarios, including deliveries that crossed city boundaries, multiple pickup or drop-off points, partially fulfilled or cancelled orders, technical bugs and incomplete banking information.
DoorDash said it had fixed the underlying technical bugs and agreed to provide New York City with detailed monthly pay data for the next three years.
City officials declined to say whether competitors Uber Eats or Grubhub are currently complying with the 2023 pay law.
