DoorDash settles New York worker pay claims for $131.5 million

DoorDash will pay $131.5 million to settle a New York City investigation that found the delivery company underpaid workers or paid them late, in what Mayor Zohran Mamdani called the city’s largest labor enforcement action.

The settlement, announced Tuesday, covers about 264,000 delivery workers, known by the company as Dashers. Nearly $115 million will go to workers, with a median payout of about $48, while DoorDash accepted a $16.7 million civil fine. Al Jazeera reported that city officials described the agreement as the largest settlement for delivery workers in any U.S. city and said it is set to affect 260,000 workers.

“Simply put, we screwed up,” San Francisco-based DoorDash said in a statement. “Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren’t intentional, that doesn’t make them OK.”

The accord advances New York City’s enforcement of a 2023 minimum-pay law for app-based delivery workers. The rule, established under former Mayor Eric Adams, initially called for a minimum pay rate of $17.96 an hour and was set to rise to $19.96 an hour when fully implemented in 2025.

At a news conference, Mamdani said DoorDash failed to comply with the law by not counting every hour delivery workers were entitled to have included in their pay calculations. “For years, DoorDash failed to count every hour worked by delivery workers,” he said. “This was not a rounding error or an accidental mistake.”

Mamdani also said the settlement was “part of a larger commitment to hold delivery companies accountable.” He added: “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.”

A nearly 70-page consent order provided to Al Jazeera by the city’s Department of Consumer and Worker Protection found that DoorDash failed to pay some workers the legally required minimum between December 2023 and June 2026. The order said some underpayments were expected to continue through November before corrective measures take effect.

The payout includes $83 million to resolve a dispute over how to calculate pay for workers who were logged into the DoorDash app but were not actively making deliveries. Another $12.3 million addresses payments that were missed or arrived days or weeks late. DoorDash confirmed that roughly $6.6 million in payments never reached delivery workers and that there were more than $5.7 million in late payments, Al Jazeera reported.

The city said underpaid workers will receive 200% of what they were originally owed. Under the city’s example, a worker owed $1,000 but never paid would receive $3,000, while a worker paid $1,000 later than allowed under the law would receive $2,000.

DoorDash said many errors stemmed from deliveries that crossed city boundaries, involved multiple pickup or drop-off locations, were partially fulfilled or were canceled. It also cited technical bugs and incomplete banking information for workers, and said it has fixed the technical issues that caused the mistakes. The company agreed to send detailed pay data to the city every month for three years and said it will notify affected workers in the coming weeks.

The settlement comes nearly eight months after the city’s consumer and worker protection department accused DoorDash and Uber Eats of using “design tricks” to deprive workers of more than $550 million in tips. City officials declined to say whether Uber Eats and Grubhub are complying with the 2023 pay law. Uber declined to comment, and Grubhub did not immediately respond to requests for comment.

DoorDash shares rose 0.2% in afternoon trading.