DoorDash to Pay $131.5M Settlement Over Underpaid New York Workers
The food delivery giant acknowledged errors in calculating wages for thousands of drivers.
DoorDash has agreed to pay a $131.5 million settlement to New York City regulators after admitting to underpaying thousands of workers and delaying wages. The company acknowledged its "mistakes meant some Dashers were underpaid or paid late."
The agreement with the Department of Consumer and Worker Protection follows a city investigation into wage violations. A significant portion of the settlement addresses how DoorDash calculated compensation for the time delivery drivers spent waiting for orders.
DoorDash attributed the errors to complex changes in New York state's minimum wage standards for app-based delivery workers, which took effect in 2023. The company also cited technical glitches and the complexities of multi-stop delivery routes for causing the payment issues.
"While these mistakes weren't intentional, that doesn't make them okay," DoorDash stated. The company estimated that the errors affected approximately 264,000 workers, though it maintained that the issues impacted less than 1% of all local transactions. Systemic errors resulted in about $6.6 million in wages never reaching workers, and an additional $5.7 million arriving late.
DoorDash stated that local workers currently earn an average of roughly $30 per active hour and confirmed that the software bugs responsible for the underpayments have been fixed. This settlement is the latest development in ongoing tensions between gig economy platforms and city officials regarding worker compensation and regulations.