DoorDash Admitted It Messed Up — and It's Going to Cost Them $131.5 Million

DoorDash will pay $131.5 million to settle claims that it underpaid delivery workers in New York City, Mayor Zohran Mamdani announced Tuesday. The settlement is the largest worker settlement in New York City history and the largest settlement involving food delivery workers in the United States.

The company didn't dispute the findings. It owned them.

"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," DoorDash said in a statement on its website.

Mayor Mamdani's response to that statement was dry and direct. "I've never heard someone describe a $131.5 million settlement in that kind of language," he said.

What DoorDash Actually Did

The settlement came nearly eight months after the city's Department of Consumer and Worker Protection (DCWP) accused DoorDash and rival Uber Eats of engineering what it called "design tricks" to deprive workers of more than $550 million in tips.

A city report found that tipping on the platforms dropped sharply after changes were implemented in December 2023, with average tips falling from $3.66 per order to 93 cents in the first week after the changes took effect and later declining to 76 cents per delivery.

The DCWP opened its investigation after dozens of workers reported problems receiving money they had earned. Regulators eventually examined more than 152 million payment transactions and 110 million hours of work to determine whether DoorDash complied with the city's delivery worker laws.

DoorDash said many errors resulted from deliveries that crossed city boundaries, had multiple pickup or drop-off locations, or were only partially fulfilled or canceled. Whether that explanation satisfies the 264,000 workers who ended up shortchanged is another matter.

How the Money Gets Distributed

Workers do not need to file a claim or submit evidence to receive payment. DCWP has identified all individuals owed money through its analysis of DoorDash's records. In late October, DCWP's Settlement Administrator will send personalized emails to each worker who experienced an underpayment from April 22, 2022, to June 28, 2026.

Workers will be able to choose between an electronic payment and a check by mail. Workers who do not make a selection will receive a check at their last-known address.

The settlement can produce payments well above the amount originally missing. A worker who was owed $1,000 and received nothing would receive $3,000 under the agreement. A worker whose $1,000 payment arrived later than city law allows would receive $2,000.

DoorDash's median payout will be about $48. For individual workers that number is modest, but multiplied across 264,000 people it adds up fast. A second round of payments will be made to a small group of DoorDash workers in early 2027 because DoorDash is still correcting elements of the compensable-time calculation logic that caused additional underpayments.

The Bigger Picture for Gig Workers

This settlement doesn't exist in isolation. New York City has been the most aggressive municipality in the country when it comes to protecting delivery workers — passing the nation's first minimum pay law for app-based delivery workers in 2023, requiring platforms to give workers more transparency about their earnings, and pushing back hard when companies appeared to game the system.

"When a worker earns a wage, they deserve to be paid that wage — not tomorrow, not after a lawsuit, but on time," Mamdani said at Tuesday's announcement.

Uber Eats, which was accused alongside DoorDash in January's investigation, has not announced a settlement and did not immediately respond to requests for comment. That case appears to still be active.

For the 264,000 Dashers who delivered food across New York City while being quietly shortchanged, the emails start coming in late October.

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