NEW YORK CITY— DoorDash will pay $131.5 million to settle a New York City investigation into underpayments and late payments affecting more than 264,000 delivery workers, while agreeing to three years of city oversight of its pay practices.
The settlement, reached with the Department of Consumer and Worker Protection, includes $115 million in payments to workers and roughly $16 million in civil penalties.
The agreement resolves a dispute over how DoorDash calculated pay for delivery workers after the City introduced new minimum-pay rules in 2023.
For workers, the settlement means they will not need to file claims or prove they were underpaid.
The City said it has identified the workers who are owed money and will notify them by email in late October.
The investigation began in 2023 after delivery workers reported missing wages to the Workers Justice Project, a labor rights organization.
City investigators then reviewed more than 152 million payment transactions and found that DoorDash failed to count some work time, including time connected to canceled deliveries and trips crossing City limits.
"This was not a rounding error or an accidental mistake," Mayor Zohran Mamdani said at a news conference on Tuesday.
"City Hall will not sit idly by while a mega corporation that made nearly a billion dollars in profits last year rips off the working people who keep our City moving."
Thousands of workers received no payment or received payments late, Mamdani said.
DoorDash reported that the payment errors resulted from technical bugs or complicated deliveries involving multiple pickup or drop-off locations, trips crossing City boundaries and partially completed or canceled orders.
It also attributed some problems to incomplete or inaccurate banking information provided by workers.
"Simply put, we screwed up," DoorDash said in a statement. "Dashers should be paid in full, on time, every time. We are sorry to the Dashers we let down."
About $83 million of the worker relief will compensate delivery workers for time they spent logged into DoorDash between deliveries, according to the company.
The median payment will be about $48, while some workers will receive more than $10,000, according to Samuel Levine, commissioner of the Department of Consumer and Worker Protection.
The settlement covers violations dating from April 2022 through June 2026, according to the City.
New York City delivery workers receive a minimum rate for time spent making deliveries, along with additional compensation under the City's rules.
The system can produce different payments for workers who spend the same amount of time on the job because compensation can also depend on factors such as delivery performance.
DoorDash must provide the City with detailed monthly data for three years so officials can check whether the company complies with rules governing minimum pay, trip information, distance limits and the disclosure of pay and tips.
The City also plans to work with the Workers Justice Project and the Workers Algorithm Observatory, a group focused on examining how automated systems affect workers, to develop software allowing delivery workers to share their trip and pay data directly with city officials.
That system will give investigators a second source of information instead of relying solely on DoorDash's records.
DoorDash said it has corrected the technical problems identified during the investigation and will add oversight to ensure compliance with City rules. The company said it chose the settlement rather than spend years litigating how worker pay should be calculated.
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