By Jonathan Stempel
NEW YORK, Sept 22 (Reuters) – DoorDash said on Tuesday it reached a $131.5 million settlement of a New York City government probe that found the food delivery company underpaid or waited too long to pay workers.
The settlement with the city’s Department of Consumer and Worker Protection helps address the city’s longstanding concern that food delivery companies shortchange workers.
It came nearly eight months after the city agency accused DoorDash and rival Uber Eats of engineering what it called “design tricks” to deprive workers of more than $550 million in tips. The settlement includes a $16.7 million fine, DoorDash said.
Uber did not immediately respond to requests for comment.
DoorDash said it will provide nearly $115 million in relief to about 264,000 workers, whom it calls Dashers.
This amount includes $83 million to resolve a dispute with the city over how to calculate pay for workers who were logged into the app and on-call but not actually making deliveries. It also includes $12.3 million for payments that were missed or arrived days or weeks late.
“Simply put, we screwed up,” the San Francisco-based company said in a statement. “Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren’t intentional, that doesn’t make them okay.” DoorDash said its median payout will be about $48.
The consumer and worker protection agency and the office of New York City Mayor Zohran Mamdani did not immediately respond to requests for comment.
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. It said other errors resulted from technical bugs, or having incomplete banking information for workers.
The company said it has fixed technical issues that caused the mistakes.
DoorDash and delivery app rivals including Grubhub and Uber Eats have had multiple legal battles with New York City, including challenges to its tipping laws and whether they must share customers’ data with restaurants.
(Reporting by Jonathan Stempel in New York; Editing by Sam Holmes, Alexandra Hudson)
