DoorDash to Pay $131.5 Million After Underpaying New York Delivery Workers

DoorDash has agreed to pay $131.5 million to settle a New York City government investigation that found the food delivery company underpaid workers or delayed payments owed to them, according to details of the settlement.

As part of the agreement, DoorDash will award backpay to roughly 264,000 workers affected by the underpayment practices identified in the investigation. New York City Mayor Zohran Mamdani described the settlement as the city's largest labor enforcement action, criticizing what he called the company's use of “greedy algorithms” in setting worker pay.

Enforcing Delivery Worker Pay Rules

The settlement advances New York City's ongoing effort to enforce a 2023 law aimed at improving pay standards for food delivery workers, a measure that set minimum payment requirements for delivery platforms operating in the city. The investigation into DoorDash's pay practices examined whether the company complied with those requirements.

The scale of the settlement, both in total dollar amount and the number of workers affected, marks a significant enforcement action against a major gig-economy delivery platform. Mamdani's characterization of DoorDash's pay algorithms suggests city officials found the company's payment calculation methods to be a central factor in the underpayment findings.

DoorDash's specific response to the settlement terms, including any changes to its pay practices going forward, was not detailed in the available information. The settlement is expected to result in direct payments to the affected workers as part of the backpay awards.

The case adds to a broader pattern of scrutiny facing gig-economy delivery companies over worker pay and labor practices in cities across the country.