DoorDash settles with New York City for $131.5 million in workers' suit

Sept. 22 (UPI) — DoorDash has settled for $131.5 million with New York City allowing closer monitoring of payment methods to employees after it underpaid delivery workers.

“When a worker earns a wage,” Mayor Zohran Mamdani said in a statement, “they deserve to be paid that wage — not tomorrow, not after a lawsuit, but on time and in full.”

“Simply put, we screwed up. Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren’t intentional, that doesn’t make them okay. We pride ourselves on operational excellence at DoorDash — and this was not excellent, nor was it acceptable. Dashers should be paid in full, on time, every time. We are sorry to the Dashers we let down,” DoorDash said in a statement.

The settlement was with New York City’s Department of Consumer and Worker Protection.

The $131.5 million settlement with the City includes $12.3 million for 264,000 delivery workers who were underpaid or paid late, and over $83 million to resolve a disagreement over how to calculate pay for time they spend online between deliveries. DCWP is getting $16.7 million in fines owed to them as part of the settlement.

The city has been cracking down on delivery companies for mistreating workers for years, The Times said.

DoorDash said it believes that its way of paying workers is “fair, practical and legal” but “rather than spend years fighting over whose method was right, we chose to pay Dashers sooner and use the city’s method going forward.”

The settlement also includes a three-year monitoring program that requires the company to send detailed data to the city for auditing.

“This sends a strong message that we are in a new era of enforcement in New York,” said Samuel Levine, DCWP commissioner, in an interview with the New York Times. “We will not tolerate nickeling and diming New York City workers.”

The company didn’t adhere to a 2023 law meant to improve the pay of delivery workers in New York. It helps workers get paid for the time they spend waiting for the orders to arrive and increases pay for the time they spend delivering.

DoorDash said the workers will get about $48 each. But Levine said some will be paid more than $10,000.

The settlement “should send a clear message to every other app that we’re going to go after them,” said Ligia M. Guallpa, executive director of the Workers Justice Project, The Times reported. “For too long DoorDash has treated workers as disposable,” she said.