DoorDash agrees to pay $131.5 million in New York settlement

DoorDash settled Tuesday with New York City’s Department of Consumer and Worker Protection over compliance with the pay rules for delivery workers. The $131.5 million settlement with the city includes $12.3 million for drivers, called Dashers, who were underpaid or paid late. It also included over $83 million to resolve a disagreement over how to calculate pay for the time Dashers spend online between deliveries. The city is receiving $16.7 million in fines as part of the settlement. DoorDash will pay $115 million to 260,000-plus workers it either did not pay at all or paid late. New York Mayor Zohran Mamdani’s office labeled the settlement as the largest one involving food delivery workers in the United States and the largest worker settlement in the city’s history.

What did DoorDash say? In its own statement, the company acknowledged its mistake but denied that the payment errors were intentional. They said they are fixing the cause of the problem and paying every Dasher what they’re owed.

The company said New York City has the most complex earning standard for delivery workers in the country. Under the city’s minimum pay rate starting in 2023, food delivery workers in New York City receive at least $22.13 per hour.

What is on-call or online time? According to DoorDash, most of the settlement wasn’t about late or missing pay, but how to calculate bonuses paid to Dashers for online or on-call time. These are the hours a Dasher is logged into the app but not on an active delivery. Under the city’s rules, Dashers must be paid for this time spent online between deliveries. DoorDash calculated on-call time differently from the city. DoorDash believed its approach was fair, practical, and legal. But rather than spend years fighting over whose method was right, DoorDash chose to pay Dashers sooner and use the city’s method going forward.