America’s largest food delivery company DoorDash admits it underpaid or paid late to 200,000-plus workers in New York City for over three years, will pay $131.5 million in settlement; and apologises

​DoorDash will pay $131.5 million to settle a New York City probe into its pay practices for delivery workers. The company said the agreement will result in payments to more than 260,000 Dashers. The company also acknowledged that between April 2022 and June 2026, some employees were underpaid or paid late.​More than $115 million of the settlement will go directly to workers, while the remainder will cover civil penalties and other costs. The settlement also resolves a dispute over how DoorDash calculated pay for time workers spent logged into the app between deliveries. The company has apologised and said it has fixed the technical issues that led to the payment errors.​

DoorDash admits payment mistakes

​DoorDash acknowledged the problems in a statement announcing the settlement and said the errors were not intentional but still unacceptable.​In a blog post, the company wrote, “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.”​According to DoorDash, around 264,000 Dashers will receive payments, including about 209,000 for missing or late payments. The company said around $6.6 million in payments never reached workers, while another $5.7 million arrived days or, in some cases, weeks late.​The average missing payment was $7.70, while 65% of affected Dashers were underpaid by $1 or less. The company said the median settlement payment will be around $48.​

$83 million of settlement covers pay calculation dispute

​Not all of the $131.5 million settlement relates to missing or late payments. DoorDash said $12.3 million will cover Dashers who were underpaid or paid late, while more than $83 million resolves a disagreement with New York City over how to calculate pay for online or on-call time.​This refers to periods when a Dasher is logged into the app and available for work but is not actively completing a delivery. DoorDash said it used a different method to calculate this time and maintained that its approach was fair, practical and legal. Rather than continue the dispute, the company agreed to use the city’s calculation method going forward.​The remaining $16.7 million will go to the city’s Department of Consumer and Worker Protection as fines and other costs.​

DoorDash blames technical and complex delivery issues

​DoorDash said some of the payment errors were caused by technical bugs and complicated delivery situations. These included trips crossing city boundaries, deliveries involving multiple pickup or drop-off locations and orders that were partially completed or cancelled.​The company also said some payment problems stemmed from incomplete or inaccurate banking information provided by Dashers. DoorDash said less than 1% of all payments to its New York City Dashers were affected.​“We’ve addressed the issues that caused these errors and made changes to prevent them from happening again,” DoorDash highlighted.​The company said it has strengthened its compliance programme and improved validation of banking information to identify potential payment problems before they result in missed payments.​

Workers to receive payments without filing claims

​The settlement covers workers identified through the city’s analysis of DoorDash records, so eligible Dashers do not need to file a claim or submit evidence to receive their payments. Workers will be contacted directly with payment details. DoorDash said affected workers will receive at least $10, even when the amount they were originally underpaid was lower.​New York City officials said more than $115 million will be distributed directly to workers. The city has also established a monitoring programme under which DoorDash will provide detailed monthly data for three years to help officials check compliance with payment rules.​The settlement follows New York City’s introduction of a minimum pay rate for app-based delivery workers. The current rate is $22.13 per hour, excluding tips. DoorDash added its Dashers in New York City have earned more than $1 billion since the city’s pay standard took effect in 2023, with average pay before tips at roughly $30 per active hour.