Uber Eats and other delivery apps are set to pay over $5 million in compensation for lost time due to cancellations and related issues, based on a proposed settlement with the city.
Mayor Zoran Mamdani announced on Friday that Uber Eats, Fantuan, and Hungry Panda will collectively pay $5.195 million in fines and restitution to more than 49,000 delivery workers for not adhering to the city’s minimum wage laws.
“This settlement not only offers tangible relief to thousands of New Yorkers but also marks a stand against corporate exploitation,” said the mayor in a statement.
“When companies violate the law and benefit from such exploitation, they will face consequences,” Mamdani added.
As part of the agreement, Uber Eats will pay $3.15 million in compensation along with $350,000 in civil fines and fees to over 48,000 workers in the city.
This means an average of around $66 per employee.
A city investigation revealed that Uber Eats failed to pay minimum wage for the time workers spent on canceled trips from December 2023 to September 2024.
Fantuan will pay more than $468,000 in restitution to 285 workers in the city and over $52,000 in civil fines. This averages about $1,642 for each affected employee.
Additionally, Hungry Panda will provide over $1,068,672 in restitution to more than 1,000 workers along with more than $106,327 in civil fines. On average, this amounts to roughly $1,068 per worker.
Uber has also agreed to reinstate workers whose accounts were disabled between December 2023 and September 2024, which could impact around 10,000 delivery workers, according to the mayor’s office.
The city’s minimum wage rules for app-based delivery workers were established in 2021, aiming to raise wages even as inflation had led to decreases in pay, from $21.44 to $22.13 in April.
This settlement is yet another development in Mamdani’s efforts against delivery apps.
Earlier this month, the Department of Consumer and Worker Protection launched a lawsuit against Motoclick, a Bolivia-based company that claims to offer third-party delivery solutions compatible with major apps like Uber Eats and DoorDash.
The lawsuit alleges that Motoclick takes money from its employees by imposing a $10 fee for canceled orders and deducting refunded order amounts from their wages.
A recent report from the department accused DoorDash and Uber Eats of pressuring workers by over $550 million by requiring customers to provide tips after deliveries instead of before.
New legislation now mandates that delivery app companies promote tipping at checkout, with a standard rate of 10%. Some services, like Instacart, have introduced a $5.99 “fee” in response to New York’s regulations for delivery drivers.
