DoorDash admits it ‘screwed up’ as 264,000 NYC Dashers set to receive payments

# DoorDash Agrees to $131.5 Million Settlement Over NYC Delivery Worker Pay

DoorDash has agreed to pay $131.5 million to resolve a dispute with New York City over payments to delivery workers, after acknowledging that thousands of Dashers were either underpaid or received their earnings late.

The settlement with New York City’s Department of Consumer and Worker Protection (DCWP) is expected to provide payments to approximately 264,000 delivery workers. DoorDash said about 209,000 of those workers are being compensated specifically for payments that were either below the amount owed or delayed.

The company acknowledged the payment issues in a statement posted on X, saying that more than 200,000 New York City Dashers had experienced underpayments or late payments since 2023 under the city’s delivery worker pay rules.

DoorDash said the errors were unintentional but accepted responsibility for them and apologized to the affected workers.

Under the settlement, $12.3 million will be distributed to Dashers who did not receive their full earnings or were paid after the expected payment date. The company will also pay more than $83 million to resolve a separate disagreement with the city over how compensation should be calculated for time workers remained logged into the platform and available for orders between deliveries.

DoorDash will additionally pay $16.7 million in penalties to the DCWP.

The payment problems stem from New York City’s delivery-worker compensation system, which took effect in 2023. The rules require delivery platforms to compensate workers for time spent completing deliveries as well as eligible periods when they are logged into the platform and available for assignments.

DoorDash has described New York City’s pay requirements as among the most complicated earning standards for app-based delivery workers in the United States.

According to the company, several technical and operational issues contributed to payment errors. These included deliveries crossing city boundaries, orders involving multiple pickup or drop-off locations and deliveries that were partially completed or canceled.

DoorDash also said inaccurate or incomplete banking information supplied by some Dashers contributed to cases in which payments did not reach workers as expected.

The company estimated that approximately $6.6 million in payments were never received by workers, while another $5.7 million was delivered several days or, in some cases, weeks late.

The average missing payment was approximately $7.70. DoorDash said 65% of affected Dashers were underpaid by $1 or less.

As part of the settlement, however, every affected worker will receive at least $10, even when the amount originally owed was smaller. The median payment is expected to be approximately $48.

A substantial portion of the settlement relates to a different issue involving how DoorDash calculated compensation for workers who were logged into its platform and available to accept deliveries but were not actively completing an order.

DoorDash said it had been compensating workers for this period under the city's rules but used a different calculation method from the one preferred by New York City officials.

The company maintained that its approach was fair, practical and lawful. Rather than continue the dispute through potentially lengthy litigation, DoorDash agreed to adopt the city’s calculation method going forward and make payments under the settlement.

The calculation issue was particularly complicated in situations where Dashers were outside New York City, including areas of New Jersey or Long Island, while remaining available to accept delivery requests within the city’s five boroughs.

DoorDash said it has already set aside the full settlement amount and made changes to its payment systems. The company said it has addressed technical problems that contributed to the errors and strengthened its compliance procedures.

It has also introduced additional checks for banking information to help identify potential payment problems before they result in missed or delayed earnings.

DoorDash said affected Dashers will be contacted directly with information about the payments they are eligible to receive.

New York City Mayor Zohran Mamdani also commented on the agreement, emphasizing that delivery workers should receive the wages they have earned on time and in full.

The settlement follows a broader dispute over New York City’s minimum-pay requirements for app-based delivery workers. The rules took effect in 2023 after legal challenges involving DoorDash, Uber and Grubhub.

DoorDash said New York City Dashers have earned more than $1 billion since the rules were introduced, with average earnings of approximately $30 per active hour before tips.

The company also said the identified payment problems affected less than 1% of all payments made to New York City Dashers.

Despite the relatively small share of affected transactions, DoorDash acknowledged that payment errors can have a significant effect on workers who depend on delivery income.

The settlement brings the dispute closer to resolution while requiring DoorDash to compensate affected workers, pay penalties and adopt New York City’s method for calculating certain periods of worker availability.