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DoorDash will pay $131.5 million to settle allegations that the company underpaid delivery workers in New York City, marking one of the largest municipal settlements involving food delivery workers in the United States.
New York City Mayor Zohran Mamdani announced the agreement during a Tuesday news conference, accusing the company of treating “greed as a business model” and criticizing DoorDash CEO Tony Xu over comments about using a “greedy algorithm” in business decision-making.
DoorDash Faces Historic NYC Worker Settlement
The settlement follows an investigation by the city’s Department of Consumer and Worker Protection, which reviewed approximately 152 million payment records. City officials said the investigation found that DoorDash failed to properly count all hours worked by delivery drivers.
The alleged discrepancies included time spent on canceled trips and deliveries that crossed New York City limits. Officials also said some workers were not paid correctly after the city began enforcing a minimum pay rate for app-based delivery workers in 2023.
More than 260,000 delivery workers who were underpaid between April 2022 and June 2026 are expected to benefit from the agreement. Some workers could receive as much as $5,000, depending on the amount they were allegedly owed.
- About $115 million will be distributed directly to delivery workers.
- Some eligible workers may receive payments of up to $5,000.
- Additional funds will cover fines and new worker-protection technology.
- DoorDash must submit payment compliance data to New York City for three years.
Powerful Response From Mayor Zohran Mamdani
Mamdani said the settlement represented the largest agreement for food delivery workers ever secured in American municipal history. He argued that the alleged underpayments were not merely technical mistakes or isolated accounting errors.
“For years, DoorDash failed to count every hour worked by delivery workers,” Mamdani said. He added that the company left out time connected to canceled trips and deliveries that crossed city boundaries.
The mayor also announced plans for software that would allow delivery workers to record information from the DoorDash app and share payment data with the city. The goal is to give workers and regulators more insight into the algorithms that influence delivery assignments, schedules and earnings.
“For the first time, workers will have the power to crowdsource data and investigate the black box algorithms that dictate their schedules and pay,” Mamdani said.
DoorDash Says Underpayments Were Unintentional
DoorDash acknowledged the payment problems but disputed the suggestion that the company intentionally withheld wages. In a statement reported by the Associated Press, the company said the errors were not deliberate but accepted responsibility for the impact on delivery workers.
“Simply put, we screwed up,” DoorDash said. The company added that Dashers should be paid “in full, on time, every time” and apologized to workers affected by the mistakes.
The settlement requires DoorDash to provide regular payment information to New York City for three years. That requirement could give city officials a continuing way to monitor compliance and identify future discrepancies.
Broader Impact on the Gig Economy
The agreement is the latest move by Mamdani’s administration targeting food delivery companies and alleged labor violations. In January, the city announced a $5 million settlement involving several companies, including Uber Eats, over claims that drivers were not paid the required minimum wage.
In April, the administration also secured an $875,000 settlement with HungryPanda over allegations that the company charged businesses illegal junk fees.
The DoorDash case highlights the growing debate over how gig-economy companies calculate worker pay. Delivery platforms often rely on complex software to assign orders and determine compensation, making it difficult for workers to independently verify whether every minute and mile is included.
For delivery drivers, the settlement could provide immediate financial relief. For the broader industry, it creates a significant warning that cities may demand greater transparency from companies that use automated systems to manage independent contractors.
Frequently Asked Questions About the DoorDash Settlement
How much will DoorDash pay in the settlement?
DoorDash will pay $131.5 million under the agreement with New York City. Approximately $115 million is expected to go directly to eligible delivery workers.
Who may qualify for a payment?
More than 260,000 workers who delivered for DoorDash in New York City between April 2022 and June 2026 may qualify for payments, depending on the city’s eligibility process.
How much could workers receive?
Some eligible workers may receive up to $5,000. The final amount will depend on the worker’s payment history and the amount city officials determine was owed.
What did DoorDash say about the allegations?
DoorDash said the underpayments were unintentional, acknowledged that the mistakes were unacceptable and apologized to affected delivery workers.
