DoorDash agreed to pay $131.5 million to settle allegations that it underpaid or delayed payments to hundreds of thousands of delivery workers in New York City.
The city’s Department of Consumer and Worker Protection described the agreement as the largest worker settlement in New York City history and the largest involving food delivery workers in the U.S. More than $115 million will go to workers, while DoorDash will pay another $16.7 million in civil penalties and costs.
The department said its investigation uncovered “systematic violations” of local delivery worker laws. DoorDash, meanwhile, acknowledged that it made mistakes while trying to comply with what it called “the most complex earnings standard for delivery workers in the country.”
“Simply put, we screwed up,” the company 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 okay.”
The issues emerged after New York City began enforcing a minimum-pay standard for app-based delivery workers in December 2023. The rate, which is adjusted annually for inflation, currently stands at $22.13 per hour before tips.
DoorDash said technical bugs led to errors involving deliveries that crossed city boundaries, included multiple pickup or drop-off points, or were partially completed or canceled. In other cases, the company attributed missed payments to incomplete or inaccurate banking information provided by workers.
Approximately 264,000 Dashers will receive a payment under the settlement. That includes about 209,000 workers affected by missing or late payments.
DoorDash said roughly $6.6 million in payments never reached workers, while another $5.7 million arrived days or, in some cases, weeks late. The company said less than 1 percent of its payments to New York City Dashers were affected. Workers covered by that portion of the settlement will receive at least $10, even if the original shortage was smaller.
A larger share of the settlement stems from a disagreement over how DoorDash calculated compensation for “on-call” time, or the period when a worker was logged into the platform but not actively completing a delivery.
City officials said DoorDash excluded several categories of trip and on-call time when determining compensable hours under the minimum-pay rule. DoorDash maintained that workers were paid for on-call time but said its methodology differed from the city’s formula.
“We calculated on-call time differently than the City, and believe our approach was fair, practical, and legal,” the company said. “But rather than spend years fighting over whose method was right, we chose to pay Dashers sooner and use the City’s method going forward.”
The company will pay more than $83 million to resolve that part of the dispute.
The investigation began after dozens of workers reported that DoorDash either failed to pay them or did not pay them on time. The agency subsequently widened its review, analyzing billions of data points covering more than 152 million payment transactions and 110 million working hours.
Workers who did not receive timely payments will be compensated at approximately twice the amount they were underpaid, in addition to receiving the original unpaid wages. The city said a worker who was never paid $1,000, for example, would receive $3,000. Someone who received the same amount later than permitted would receive $2,000.
The agreement also establishes a three-year monitoring program. DoorDash must submit detailed monthly data to the city, update its software, adopt additional internal controls, and assign a compliance monitor to document and correct future violations.
The city is also working to develop software that will let couriers send trip and earnings data directly to regulators. The tool is intended to give the agency an independent way to identify potential violations rather than relying solely on information supplied by delivery platforms.
DoorDash said it fixed the technical problems that contributed to missing and late payments and strengthened its compliance program. It also said the full settlement amount was set aside in prior quarters.
“This settlement reflects the responsibility we take for falling short,” the company said. “We’re making things right by paying every impacted Dasher what they are owed and fixing what caused this so it doesn’t happen again.”
