DoorDash Settles NYC Pay Dispute for $131.5 Million

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DoorDash has reached a settlement with New York City, agreeing to pay $131.5 million after admitting to underpaying, delaying, or failing to compensate over 260,000 delivery workers. The agreement, announced by Mayor Zohran Mamdani and the Department of Consumer and Worker Protection (DCWP), marks the largest worker settlement in New York City history and the largest involving food delivery workers in the U.S.

The investigation revealed that DoorDash failed to pay thousands of workers for completed work, paid many late, and excluded certain trip and on-call time when calculating compensation under the city’s minimum pay rules. Investigators analyzed over 152 million payment transactions and 110 million working hours to reach these findings.

DoorDash acknowledged that technical problems and errors led to the violations, with the company admitting that some workers were underpaid or paid late. In a statement, the company said, “We screwed up,” and took full responsibility for the mistakes.

The settlement includes over $115 million directly to delivery workers, with DoorDash also paying more than $16 million in civil penalties and costs. The agreement also subjects DoorDash to three years of compliance monitoring, including monthly reports to city regulators and additional internal controls.

New York City’s minimum pay rate for app-based restaurant delivery workers is currently $22.13 per hour before tips. Workers affected by underpayments between April 2022 and June 2026 are expected to begin receiving settlement notices in late October.

Rival gig-economy companies Uber and Lyft agreed in 2023 to pay a combined $328 million to settle similar allegations in New York. A Seattle ordinance also increased minimum compensation for app-based workers, but DoorDash workers later reported declining earnings due to higher fees impacting customer demand.

Source: Daily Caller

Written by

Connor Davis