New York City reached a settlement with the gig delivery platform DoorDash that will bring $115 million to the city’s drivers and create a new monitoring system of the company’s pay practices.
The deal resolves allegations that DoorDash underpaid more than 260,000 drivers. The city said it was the largest labor enforcement action in its history.
“When a worker earns a wage, they deserve to be paid that wage — not tomorrow, not after a lawsuit, but on time and in full,” Mayor Zohran Mamdani said in a statement Tuesday.
The settlement also includes more than $16 million in civil penalties.
DoorDash acknowledged in a statement Tuesday that some workers had not been paid what they were owed and that it was now “making it right.” The settlement only applies to New York City and doesn’t impact DoorDash’s operations elsewhere.
“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.”
Under the agreement, DoorDash has to submit monthly pay data to the Department of Consumer and Worker Protection for a period of three years. The city said it will audit that data to make sure the company is complying with the settlement.
The DCWP said it began an investigation after dozens of drivers told the agency DoorDash had failed to pay them on time or at all. A review of millions of pay transactions revealed that thousands more had been stiffed, the city alleged, and those workers will be compensated by double the amount they were underpaid.
In 2023, New York City created a minimum pay rate rule meant to boost wages for the city’s huge fleet of app-based food delivery drivers, sometimes called deliveristas. The case against DoorDash included claims the company had failed to adhere to the legal minimum, which now stands at $22.13 per hour.
DoorDash said it had made mistakes “despite our best efforts to comply with the new law.”
“Many errors were caused by technical bugs or happened in complicated situations: deliveries that crossed city boundaries, had multiple pickup or drop-off locations, or were only partially fulfilled or cancelled,” the company said. “In other cases, errors stemmed from Dashers providing incomplete or inaccurate banking information.”
DoorDash insisted most of the settlement was not about “late or missing pay” but about the bonuses owed workers for time spent logged into the app and waiting “on call” between deliveries.
City officials said two worker advocacy groups, the Worker’s Justice Project and the Workers’ Algorithm Observatory, plan to develop software that will enable drivers and the city to review data DoorDash provides. The deal also requires DoorDash to update its software so drivers get more information about their time and pay.
Julie Su, the city’s deputy mayor for economic justice, said in a statement the settlement showed “the damage done by wage theft.”
“But it also shows that enforcement matters,” Su added. “And in this administration, if you steal workers’ wages, it’s not enough to just pay what you should have paid in the first place.”