DoorDash Reaches $131.5 Million NYC Delivery Pay Settlement

Reuters reported that the agreement provides nearly $115 million in worker relief and a $16.7 million fine to the city’s Department of Consumer and Worker Protection. DoorDash said the relief includes $12.3 million for missing or late pay and more than $83 million to resolve an online-time calculation dispute.

As of Tuesday, the department and New York City mayor’s office had not responded to Reuters’ requests for comment. The detailed settlement figures were announced by DoorDash.

In a post on X, DoorDash took full responsibility and apologized. “Simply put, we screwed up,” the company said in its longer announcement.

“Simply put, we screwed up.”

Of the workers receiving money, 209,000 experienced missing or late payments, according to DoorDash. The company put the missing total at $6.6 million, with another $5.7 million arriving days or weeks late.

The average missing payment was $7.70, DoorDash said. It reported that 65% of affected Dashers were underpaid by $1 or less, while the median settlement payment is expected to be about $48.

Every affected worker will receive at least $10, even when the amount originally owed was smaller. DoorDash plans to contact workers directly with payment information in the coming weeks.

The largest disclosed portion of the worker relief concerns online or on-call time, when a Dasher is logged into the app but not completing a delivery. City rules require compensation for that time.

DoorDash maintained that it paid workers for online time but used a different calculation method. Although the company described its approach as fair, practical and legal, it agreed to use the city’s method going forward.

The dispute emerged due to the minimum-pay formula introduced by Local Law 115 of 2021. New York City adopted the rule in June 2023, yet DoorDash along with other delivery apps tried to stop it. The state courts permitted the enforcement to be carried out starting from December 2023.

DoorDash said New York City Dashers have earned more than $1 billion since the rule took effect. The company placed average active-hour pay before tips at roughly $30.

Technical bugs and complicated deliveries caused many of the payment errors, DoorDash said. The affected situations included deliveries crossing city boundaries, orders with multiple stops and deliveries that were canceled or only partially completed.

Incomplete or inaccurate banking information also caused some missed payments, according to the company.

DoorDash says the technical problems have been fixed. It also improved its banking-information checks and strengthened its compliance program. The company said it had set aside the full settlement amount in prior quarters.