DoorDash to Pay $131.5 Million to Settle NYC Delivery Worker Pay Probe

DoorDash Inc. (NYSE:DASH) has agreed to a $131.5 million settlement to resolve a New York City probe into its compliance with minimum-pay regulations for its delivery workers, the company announced Tuesday. The agreement addresses discrepancies in pay calculations and late or missing payments affecting hundreds of thousands of couriers.

Breakdown of the Settlement

The largest portion of the settlement, over $83 million, resolves a dispute over the calculation of workers' paid time while they are online between deliveries. While DoorDash had used a different method, it has agreed to adopt the city's calculation standard to end the disagreement.

The settlement also includes a $16.7 million fine payable to the New York City Department of Consumer and Worker Protection, the agency responsible for enforcing the pay rule. The remaining funds are designated for worker restitution.

Restitution for Workers

Approximately 264,000 couriers are expected to receive payments as part of the settlement. The funds address several specific issues identified during the probe:

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• $12.3 million will be paid to workers who were underpaid or received late payments due to invalid bank information.
• $6.6 million will cover payments that the company said never reached workers.
• $5.7 million is allocated for payments that were delayed by days or weeks.

Company Response and Context

DoorDash attributed the payment errors to technical bugs and complexities arising from certain delivery scenarios. These included orders that crossed city boundaries, involved multiple pickup or drop-off locations, or were partially fulfilled or cancelled.

The company stated it has since rectified the technical issues and has enhanced its compliance program. This settlement underscores the significant operational and financial challenges gig economy platforms face in navigating complex and evolving local labor regulations in major markets.