DoorDash to pay $131M for underpaying delivery workers in New York City

DoorDash will pay $131.5 million to settle claims that it underpaid delivery workers in New York City

NEW YORK -- DoorDash will pay $131.5 million to settle claims that it underpaid delivery workers in New York City, Mayor Zohran Mamdani announced Tuesday.

The agreement, which officials descibed as the largest worker settlement in city history, also requires the company to submit to a new monitoring system to ensure compliance with delivery worker pay laws in the city.

In a statement, DoorDash admitted errors, saying: “Simply put, we screwed up.”

“While these mistakes weren’t intentional, that doesn’t make them okay. We pride ourselves on operational excellence at DoorDash – and this was not excellent, nor was it acceptable. Dashers should be paid in full, on time, every time. We are sorry to the Dashers we let down,” the company said.

Most of the settlement will be returned to more than 260,000 workers who were underpaid, not paid or paid late for deliveries by DoorDash, according to City Hall. The company will also pay about $16 million in civil penalties and other costs to the city.

“When a worker earns a wage, they deserve to be paid that wage – not tomorrow, not after a lawsuit, but on time and in full,” Mamdani said in a statement. “DoorDash underpaid more than 260,000 workers, and today we are getting that money back."

DoorDash said many of the errors in payment were caused by “technical bugs or happened in complicated situations,” such as deliveries that went outside city boundaries, had multiple pickup or drop-off spots or included deliveries that were cancelled or partially completed.

Last year, the company agreed to pay almost $17 million to settle claims that it unfairly used customer tips to subsidize the wages of its delivery workers in New York, rather than allowing drivers to keep the tips on top of their guaranteed pay.