'We Screwed Up': Doordash To Pay $131.5m After NYC Probe Into Payments to 264,000 Workers
The settlement follows a city investigation into payment errors and includes worker compensation, fines and three years of monitoring
DoorDash will pay $131.5 million to resolve a New York City investigation into its pay practices, with about $115 million going to 264,000 delivery workers after officials found the company underpaid or delayed payments on a massive scale.
City officials described the deal as the largest worker settlement in New York City's history and the largest involving food delivery workers in the United States.
'Simply put, we screwed up,' DoorDash said in a statement posted on its website. 'Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren't intentional, that doesn't make them okay.'
The deal resolves a probe by the city's Department of Consumer and Worker Protection (DCWP), announced alongside Mayor Zohran Mamdani, and follows a January DCWP report on 'design tricks' that DoorDash and rival Uber Eats allegedly used to make tipping harder.
The city said the interface changes reduced workers' tips by more than $550 million.
How the $131.5m Payout Will Work
Of the total, about $115 million will go directly to workers DoorDash calls Dashers, with the remainder covering fines and administrative costs. Around $83 million relates to a dispute over how to calculate pay for time when Dashers were logged into the app and available for jobs but not actively making deliveries.
A further $12.3 million will cover payments that were missed entirely or arrived days or weeks late, affecting roughly 209,000 workers, with an average missing payment of about $7.70. DoorDash said most of those workers were underpaid by $1 or less, but every eligible worker will receive at least $10, with a median payout of around $48.
The DCWP will receive $16.7 million in fines. Personalised notices are due to be sent to affected workers from late October, and eligible workers will not need to file a claim to receive payment.
DoorDash attributed many of the errors to technical faults and complex delivery routes, including trips that crossed city boundaries or involved multiple stops, as well as inaccurate banking details supplied by some workers. It said it had since fixed the underlying issues and strengthened its compliance systems.
New York City Steps up Delivery App Enforcement
New York City has taken an increasingly firm stance on regulating app-based delivery platforms since its minimum-pay rules for couriers took effect in December 2023, with the rate now set at $22.13 an hour before tips. The rules establish a minimum rate for covered delivery workers in the city.
As part of the settlement, DoorDash will submit to three years of monitoring, providing regular data to the city and giving workers tools to report details of their trips and earnings directly to officials. The agreement follows the city's investigation into DoorDash's compliance with its delivery-worker pay rules.
Uber Eats remains involved in the city's enforcement actions over the tipping practices. Uber did not immediately respond to a request for comment.
City officials described the agreement as the largest worker settlement in New York City's history and the largest involving food delivery workers anywhere in the United States. The deal resolves a DCWP investigation into DoorDash's compliance with New York City's minimum-pay rules and adds to other enforcement actions involving delivery apps in the city.
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