DoorDash has agreed to pay $131.5 million to settle a New York City investigation into allegations that delivery workers were underpaid or paid late. The agreement includes payments to about 264,000 workers, known as Dashers, and a civil penalty paid to the city.
The settlement follows a wider dispute between New York officials and delivery platforms over worker compensation rules. According to Reuters, the agreement resolves claims that the company did not properly calculate certain payments and failed to deliver some wages on time.
A Settlement Covering Missed Payments and Pay Calculation Disputes
Under the agreement, DoorDash will provide nearly $115 million in relief to affected workers and pay a $16.7 million civil fine. The median payment for workers will be about $48, according to the company.
The largest part of the worker compensation amount, $83 million, addresses a dispute over how DoorDash calculated pay for workers who were logged into the app but were not actively completing deliveries. New York City rules require compensation for time workers spend logged into the platform under specific conditions.
According to the BBC, the company said the payment issues were linked to the complexity of New York’s delivery worker pay standards, along with technical problems and delivery situations involving multiple stops, canceled orders, or trips crossing city boundaries.
The settlement also includes $12.3 million for payments that were missed or arrived days or weeks late. DoorDash said it had fixed technical issues that contributed to the errors and would use the city’s calculation method going forward.
The company acknowledged the problems in a statement, saying: “Simply put, we screwed up.” It added that the mistakes were not intentional but said that did not make them acceptable.
Workers eligible for payments will not need to submit claims or provide evidence. According to The Hill, the city identified eligible workers through an analysis of DoorDash records, with notifications expected to be sent by the settlement administrator.
New York’s Broader Effort to Regulate Delivery Platforms
The agreement is part of New York City’s continued enforcement of rules governing food delivery companies. In 2023, the city introduced a minimum pay standard for app-based delivery workers, with requirements covering how compensation is calculated.
Mayor Zohran Mamdani described the settlement as a major worker enforcement action by the city. He said the case showed the importance of ensuring delivery workers are paid according to city rules.
The city had previously accused DoorDash and Uber Eats of changes to tipping systems that officials said reduced worker tips by more than $550 million. Uber Eats and Grubhub have also faced disputes with New York City over delivery worker regulations, including tipping rules and data-sharing requirements.
Officials did not announce similar settlements with other delivery companies as part of Tuesday’s agreement. Uber declined to comment, while Grubhub did not immediately respond to requests for comment. The settlement requires DoorDash to provide detailed pay data to the city every month for three years. The company said it chose to resolve the dispute rather than continue a lengthy legal fight over the interpretation of New York’s payment rules.
