- DoorDash will pay more than $115 million to about 264,000 New York City delivery workers after a city investigation found workers had been underpaid or paid late.
DoorDash (NASDAQ: DASH) has agreed to pay $131.5 million to resolve a New York City investigation into its payment practices, with more than $115 million going directly to delivery workers who were underpaid, not paid or paid late.
The settlement announced by New York City's Department of Consumer and Worker Protection covers roughly 264,000 Dashers and includes $16.7 million in civil penalties and other costs. The city described the agreement as the largest worker settlement in its history.
DoorDash acknowledged the payment problems in a statement, saying that some workers were underpaid or paid late. The company attributed the mistakes to technical issues and complicated delivery situations, including trips crossing city boundaries, multiple pickup or drop-off locations, canceled deliveries and incomplete banking information.
What DoorDash Workers Will Receive
The settlement includes more than $83 million to resolve a dispute over how DoorDash calculated compensation for time workers spent logged into the app while waiting for deliveries. Another $12.3 million will address payments that were missed or arrived days or weeks late. DoorDash said approximately 264,000 workers will receive payments, including about 209,000 workers affected by missing or late payments.
The median payout is expected to be about $48, although individual payments will vary based on each worker's circumstances. Under the city's settlement terms, workers whose pay was withheld entirely or delivered late will receive compensation above the amount originally owed.
The city said a worker owed $1,000 but never paid could receive $3,000, while a worker who received the $1,000 late could receive $2,000. Workers do not need to file individual claims to receive the payments. The city said it has identified the workers owed money using DoorDash's records.
Why New York City Took Action
The investigation centered on New York City's minimum-pay rules for app-based delivery workers. The city's Department of Consumer and Worker Protection said DoorDash excluded certain trip and on-call time when calculating compensable hours after the minimum-pay system took effect in 2023. Investigators analyzed more than 152 million payment transactions and 110 million hours of work from DoorDash data.
New York City's minimum pay rate for food delivery workers is currently $22.13 an hour, excluding tips, according to the city. DoorDash said it has corrected the technical problems that contributed to the payment errors and will use the city's method for calculating the disputed on-call time going forward.
DoorDash Faces Three Years of Monitoring
The agreement also imposes new compliance requirements on DoorDash. The company must provide detailed pay data to the city every month for three years. The monitoring will cover minimum pay, trip distances, disclosures, and pay and tip transparency.
DoorDash must also make software updates to ensure workers' compensable time is properly recorded and adopt internal controls designed to prevent similar violations. The city is also developing a system with worker advocacy groups that will allow delivery workers to share trip and earnings data directly with regulators.
DoorDash Settlement Comes Amid Broader NYC Gig-Worker Crackdown
The agreement adds to a series of disputes between New York City and food delivery platforms over worker pay, tipping and other regulations. The city previously accused DoorDash and Uber Eats of using changes to their platforms that reduced the amount of tips reaching delivery workers. The companies have also challenged aspects of New York City's delivery-worker regulations.
The legal action traces back to the administration of former New York City Mayor Eric Adams, when the city’s Department of Consumer and Worker Protection began investigating DoorDash over alleged delivery-worker pay violations. The investigation was later expanded and pursued under Mayor Zohran Mamdani’s administration, culminating in the $131.5 million settlement announced this week.
Mayor Zohran Mamdani called the latest settlement the largest labor enforcement action in New York City history. His administration said the agreement is intended not only to compensate workers for past underpayments but also to create a system for monitoring DoorDash's compliance going forward.