DoorDash Pays New York City $131.5 Million Over Underpaid Delivery Workers

DoorDash will pay $131.5 million to settle a New York City investigation into how it paid delivery workers, the company and the city's Department of Consumer and Worker Protection (DCWP) announced Tuesday. It's the largest settlement for food delivery workers in U.S. history, according to Mayor Zohran Mamdani's office.

Of that total, $115 million goes directly to more than 264,000 workers DoorDash calls Dashers, who were underpaid or paid late between April 22, 2022, and June 28, 2026. The company will also pay roughly $16.7 million in civil penalties and costs to the city.

Where the Money Actually Goes

The biggest chunk, about $83 million, resolves a dispute over how to calculate pay for "on-call time" — the hours a Dasher is logged into the app and available for orders but not actively delivering one. New York's 2023 minimum-pay law requires companies to count both active delivery time and on-call time toward the city's $22.13-an-hour floor. DoorDash says it paid workers for that time through weekly bonuses, but used a different formula than the one city regulators required.

Another $12.3 million covers payments that were simply missing or late. About $6.6 million never reached workers at all, and $5.7 million arrived days or weeks after it was due, according to figures reported by the Epoch Times. DoorDash attributed those errors to technical bugs, deliveries that crossed city lines, orders with multiple stops, partially completed or canceled trips, and incomplete banking information on file for some workers.

The scale of individual payouts varies widely. Commissioner Samuel Levine said the median payment will be about $48, while some workers will receive more than $10,000. Epoch Times reported the average missing payment was just $7.70, and that 65% of affected workers were owed $1 or less. Every affected worker will get at least $10 under the settlement.

No Claims, No Lawsuits Needed

DCWP says it identified the affected workers itself by analyzing more than 152 million DoorDash payment transactions, so nobody has to file a claim or prove they were shorted. A settlement administrator will email each eligible worker in late October with the amount owed.

The investigation traces back to 2023, when delivery workers reported missing wages to the Workers Justice Project, a labor advocacy group, according to Patch. DoorDash will also have to submit detailed pay data to the city every month for three years so officials can check compliance.

DoorDash's Defense

DoorDash didn't deny the underpayments happened. "Simply put, we screwed up," the company said in a statement carried by multiple outlets. "Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren't intentional, that doesn't make them OK."

But the company pushed back hard on the idea that it was gaming the system. DoorDash argued New York has the "most complex earning standard" for delivery workers in the country, and that its on-call time calculation was "fair, practical, and legal" — just different from what the city wanted. Rather than litigate that dispute for years, DoorDash said, it chose to pay Dashers now and adopt the city's method going forward. The company also noted its New York couriers have earned more than $1 billion since 2023, averaging about $30 an hour before tips, according to figures the company provided to The Next Web.

A genuine disagreement over how to interpret a complicated new pay formula is not the same thing as deliberately stiffing workers. DoorDash's numbers suggest the median individual harm was modest even if the aggregate total is large.

The Political Framing

Mamdani didn't accept DoorDash's characterization. At Tuesday's news conference, he invoked comments DoorDash CEO Tony Xu reportedly made on a podcast in July about pushing a "greedy algorithm" to its limits, and used the phrase repeatedly to describe the company's pay practices. "This was not a rounding error or an accidental mistake," Mamdani said, according to Patch. He also noted DoorDash "made nearly a billion dollars in profits last year."

DoorDash explicitly disputes that the errors were intentional. The settlement itself doesn't establish intent one way or the other. Both things are in the record: the city's own investigation found systemic underpayment, and the company maintains it was a good-faith methodology dispute plus software bugs.

What's Still Unresolved

The settlement doesn't touch a separate, larger allegation DCWP made in January: that DoorDash and Uber Eats used "design tricks" in their apps to deprive workers of more than $550 million in tips, according to The Guardian. No settlement or charge has been announced on that claim, and city officials declined to say Tuesday whether Uber Eats or Grubhub are currently complying with the 2023 pay law. DoorDash previously paid New York's attorney general $16.75 million in 2025 over allegations it used customer tips to reduce guaranteed driver pay.

DoorDash shares moved little on the news, rising about 0.2% in afternoon trading, according to The Guardian. Investors don't appear to see this settlement as a material threat to the company's finances.