New York City has reached a $131 million settlement with the food delivery platform DoorDash to resolve allegations that the company underpaid more than 260,000 drivers. The agreement includes $115 million intended for drivers and more than $16 million in civil penalties, the city announced Tuesday.
City officials described the settlement as the largest labor enforcement action in the city's history. The agreement also establishes a new system for monitoring DoorDash's pay practices.
DoorDash acknowledged that some workers were not paid correctly and stated it is "making it right." The company attributed the errors to technical bugs, complex delivery situations, and instances where drivers provided incomplete banking information. "Simply put, we screwed up," DoorDash 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 settlement stems from an investigation by the New York City Department of Consumer and Worker Protection (DCWP), which began after numerous drivers reported being paid late or not at all. A review of millions of pay transactions allegedly revealed that thousands more workers were underpaid. Under the terms of the settlement, these workers will be compensated double the amount they were underpaid.
The agreement requires DoorDash to submit monthly pay data to the DCWP for three years. The city will audit this data to ensure compliance. Additionally, DoorDash must update its software to provide drivers with more detailed information regarding their time and pay.
The case also addresses DoorDash's adherence to New York City's minimum pay rate rule for food delivery workers, established in 2023, which currently stands at $22.13 per hour. DoorDash stated that many of the errors occurred despite efforts to comply with the new law.
Two worker advocacy groups, the Worker’s Justice Project and the Workers’ Algorithm Observatory, plan to collaborate on developing software that will allow drivers and the city to review the data provided by DoorDash. City officials emphasized that enforcement is crucial, with Deputy Mayor for Economic Justice Julie Su stating that wage theft results in significant damage but that such actions will be met with accountability beyond simply paying the owed wages.