'Simply put, we screwed up,' DoorDash says
DoorDash has agreed to pay US$131.5 million to settle findings by New York City that it underpaid delivery workers, paid them late, or did not pay them at all.
The settlement with the city's Department of Consumer and Worker Protection (DCWP) was announced on 22 September. According to the Mayor's Office, it will deliver more than US$115 million directly to workers and more than US$16 million in civil penalties and costs. More than 260,000 workers are covered.
City officials described the deal as the largest worker settlement in New York City history. They also said it is the largest settlement involving food delivery workers in the US.
"When a worker earns a wage, they deserve to be paid that wage," said Mayor Zohran Kwame Mamdani. "No corporation is above the law."
DoorDash admitted fault in a statement.
"Simply put, we screwed up. Our mistakes meant some Dashers were underpaid or paid late," DoorDash said. "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."
According to DoorDash, the settlement includes three components. The first is US$12.3 million for workers who were underpaid or paid late. The second is more than US$83 million to resolve a dispute over how to calculate pay for time workers spend logged in between deliveries. The third is US$16.7 million in fines payable to the DCWP.
How the investigation unfolded
The DCWP investigation began after dozens of workers reported that DoorDash had failed to pay them, or had paid them late, for completed work.
The agency then used detailed pay data to widen the investigation. It found that DoorDash had failed to pay thousands of workers at all and had paid thousands more late. These workers will receive about 200% of the amount they were shortchanged.
The DCWP also found that DoorDash had breached the city's Minimum Pay Rate. It said the company left out several categories of trip time and on-call time when calculating how long workers had worked. The rate is currently US$22.13 an hour, excluding tips.
DoorDash disputed that the on-call calculation broke the law. It said it had used a different method from the city's and believed its approach was fair and legal. The company said it chose to settle rather than spend years in dispute, and it will use the city's method from now on.
DoorDash attributed the missed and late payments to three causes: technical bugs, complex deliveries that crossed city boundaries or involved several stops, and incomplete or inaccurate banking details supplied by workers.
It said fewer than one per cent of payments to New York workers were affected, and that 65% of affected workers were underpaid by US$1 or less. Every affected worker will receive at least US$10.
"The size of this settlement shows the damage done to workers by wage theft," said Julie Su, Deputy Mayor for Economic Justice.
Three years of monitoring
The settlement also places DoorDash under a three-year compliance programme with several main parts:
- DoorDash must submit monthly data reports to the DCWP.
- The Workers Justice Project and Princeton University's Workers' Algorithm Observatory will develop software that lets workers share their trip and earnings data directly with the agency. DoorDash may not prevent workers from using the tool or penalise them for it.
- DoorDash must update its software.
- An internal compliance monitor must certify the company's compliance to the city each year under oath.
DCWP Commissioner Samuel Levine said the settlement showed that "opaque algorithms will not have the final word" on delivery workers' pay.
When workers will be paid
Workers do not need to file a claim to receive payment. In late October, the city's settlement administrator will email workers who were underpaid between 22 April 2022 and 28 June 2026.
A second round of payments will follow in early 2027 for a small group of workers, because DoorDash is still correcting parts of the calculation that caused further underpayments.
DoorDash said it had already set aside the full settlement amount in earlier quarters.
