DoorDash has agreed to pay $131.5 million to settle a New York City investigation that found the food-delivery company had underpaid some workers or failed to pay them on time.
The settlement was reached with the New York City Department of Consumer and Worker Protection and includes a $16.7 million fine. More than $83 million will resolve a dispute over how DoorDash calculated compensation for delivery workers who were logged into the app and available to accept orders but were not actively completing deliveries.
The company will also provide $12.3 million in additional remedies for workers whose payments were missed or delayed by days or weeks.
DoorDash acknowledged responsibility for the payment problems, saying its errors resulted in some delivery workers receiving less than they were owed or waiting too long for their earnings. Although the company said the mistakes were unintentional, it admitted that this did not excuse their effect on workers.
According to the company, several factors contributed to the errors. These included deliveries crossing New York City’s boundaries, orders involving multiple pickup or drop-off points, and deliveries that were partially completed or canceled. Technical problems and incomplete banking information provided by some workers also caused payment delays.
DoorDash said it has since corrected the technical issues responsible for the mistakes.
The settlement represents a significant victory for delivery workers in New York, many of whom depend on app-based work as their primary source of income. Even short payment delays can place considerable pressure on workers facing the city’s high housing, transportation and living costs.
It also reflects New York City’s increasingly strict oversight of food-delivery platforms. DoorDash and competitors such as Uber Eats and Grubhub have faced several legal and regulatory disputes with the city over worker compensation, tipping practices and the sharing of customer information with restaurants.
The size of the agreement sends a clear warning to digital delivery companies that technical errors or complicated payment systems do not remove their obligation to compensate workers accurately and on time.
