DoorDash Settlement in New York City
On Tuesday, DoorDash agreed to a settlement of $131.5 million with New York City, following an investigation that revealed the food delivery service underpaid, failed to pay, or paid more than 260,000 workers later than required.
Out of the total settlement, over $115 million is set to be distributed directly to the affected delivery workers. Additionally, DoorDash will incur more than $16 million in civil penalties and associated costs, as announced by Mayor Zohran Mamdani and the Department of Consumer and Worker Protection (DCWP). This is being hailed as the largest worker settlement in the history of New York City, particularly significant for food delivery workers facilitated by a U.S. municipality.
The investigation found that DoorDash had failed to pay many workers for their completed deliveries and that others were compensated late. The results also highlighted that certain trip and on-call times were not included when determining payments, which should align with the city’s minimum pay standards, according to the DCWP. Researchers scrutinized an extensive range of over 152 million payment transactions and 110 million work hours.
DoorDash admitted to some late payments and underpayment issues, attributing these mistakes to technical glitches and other errors. “We messed up,” the company acknowledged in a public statement. “Our errors resulted in some NYC Dashers being underpaid or receiving late payments.”
The company did assert that its approach to calculating some of the contested on-call compensation was “fair, practical, and legal,” but it ultimately decided to adhere to the city’s calculation method instead of continuing to dispute the matter.
As part of the settlement, DoorDash will also be monitored for compliance over the next three years. This includes providing monthly updates to city regulators along with additional internal checks. Currently, New York City’s minimum pay for app-based restaurant delivery workers stands at $22.13 per hour, not including tips.
Workers impacted by DoorDash’s underpayments from April 2022 through June 2026 are expected to start receiving notifications regarding the settlement by the end of October.
In a related context, rival companies in the gig economy, including Uber and Lyft, reached a combined settlement of $328 million in 2023 to resolve a similar investigation in New York, which alleged improper deductions from drivers’ pay, while also ensuring minimum pay and paid sick leave protections for drivers.
Interestingly, a Seattle ordinance raised the minimum compensation for app-based workers, yet some DoorDash employees later reported that their earnings fell due to increased fees affecting customer demand.
