DoorDash Pays $131.5m After Admitting It Underpaid NYC Dashers

DoorDash has agreed to pay $131.5m (£99m) to settle with New York City regulators after admitting it underpaid or delayed wages for thousands of delivery workers.

"Simply put, we screwed up," the company said in a statement. "Our mistakes meant some Dashers were underpaid or paid late."

The deal with the Department of Consumer and Worker Protection closes a city investigation into wage violations at the San Francisco-based delivery giant. A significant share of the payout resolves a dispute over how DoorDash calculates compensation for the time drivers spend waiting between deliveries.

The bulk of the money — $83m — addresses that specific disagreement. It concerns how to calculate pay for the time workers spend logged into the app but not actively delivering.

Idle time has become a major flashpoint in the industry. Traditionally, delivery apps paid drivers only during active deliveries. New York's rules require compensation for all time logged in.

DoorDash blamed the errors on "complex" changes to the minimum wage introduced in New York state in 2023. Under the landmark minimum pay standard for app-based delivery workers, wages differ depending on the county, tipping and how many people work for the employer.

The company also cited technical glitches and multi-stop delivery routes as causes of underpayment and delayed wages.

"While these mistakes weren't intentional, that doesn't make them okay," DoorDash said.

The scale was substantial. The errors affected roughly 264,000 workers, though DoorDash insisted the issues touched under 1% of overall local transactions. Systemic failures meant around $6.6m in wages never reached workers at all. Another $5.7m arrived days or weeks late.

DoorDash said local workers earn roughly $30 per active hour on average. It has patched the software bugs responsible for the mistakes, the company said.

The settlement marks another chapter in the standoff between gig economy platforms and city leaders. Uber Eats and Grubhub have repeatedly clashed with New York officials over tipping laws, minimum wages and data-sharing requirements.

The $131.5m payout, one of the largest of its kind for a delivery platform, signals that municipal regulators intend to enforce pay standards for logged-in time — a cost structure the industry has resisted since the 2023 rules took effect.