Business

DoorDash Agrees To Fork Over $130,000,000 After Admitting It ‘Screwed Up’ By Not Paying Workers

YouTube Screenshot/New York City https://www.youtube.com/watch?v=MtCMtC50gwY

DoorDash agreed Tuesday to pay New York City $131.5 million after an investigation found the delivery giant underpaid, failed to pay or paid more than 260,000 workers late.

More than $115 million will go directly to delivery workers while DoorDash will pay more than $16 million in civil penalties and costs under the settlement announced by New York City Mayor Zohran Mamdani and the Department of Consumer and Worker Protection (DCWP). City officials called it the largest worker settlement in New York City history and the largest involving food delivery workers secured by a U.S. municipality.

The investigation found DoorDash failed to pay thousands of workers for completed work, paid thousands more late and excluded certain trip and on-call time when calculating compensation under the city’s minimum pay rules, according to DCWP. Investigators analyzed more than 152 million payment transactions and 110 million working hours.

DoorDash acknowledged that some workers were underpaid or paid late, saying technical problems and errors contributed to the violations.

“We screwed up,” DoorDash said in a statement. “Our mistakes meant some NYC Dashers were underpaid or paid late.”

The company maintained that its method for calculating some disputed on-call compensation was “fair, practical and legal,” but said it agreed to adopt the city’s calculation method rather than continue fighting the issue.

The agreement also subjected 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 currently stands at $22.13 per hour before tips.

Workers affected by DoorDash underpayments between April 2022 and June 2026 were expected to begin receiving settlement notices in late October, according to the city.

Rival gig-economy companies Uber and Lyft agreed in 2023 to pay a combined $328 million to settle a New York investigation into allegations the companies improperly deducted taxes and fees from drivers’ pay, with the agreements also providing drivers minimum-pay and paid-sick-leave protections.

A Seattle ordinance increased minimum compensation for app-based workers, but DoorDash workers later reported declining earnings as higher fees weighed on customer demand.