DoorDash will pay $131.5 million to settle a New York City investigation that found the food delivery company underpaid or paid late to hundreds of thousands of workers, in what Mayor Zohran Mamdani called the largest labor enforcement action in the city’s history.

The settlement, announced Tuesday, covers approximately 264,000 DoorDash workers — whom the company calls Dashers — who the city found were shorted on wages under a 2023 New York City law designed to guarantee minimum pay standards for food delivery workers.

“Simply put, we screwed up,” DoorDash 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.”

What the City Found

New York City’s Department of Consumer and Worker Protection opened a probe into DoorDash’s compliance with the city’s 2023 delivery worker pay law, which requires app-based delivery companies to compensate workers for all time they are logged into the app — including time spent waiting between deliveries, not just active delivery time.

The investigation found DoorDash had failed in two significant ways.

First, the company was not properly calculating pay for workers who were logged into the app but not actively making deliveries. That dispute alone accounts for $83 million of the total settlement.

Second, DoorDash missed payments entirely or sent them days or weeks late for thousands of workers. That failure accounts for an additional $12.3 million of the settlement.

Mayor Mamdani was direct in his criticism at a press conference announcing the deal.

“For years, DoorDash failed to count every hour worked by delivery workers,” Mamdani said. “This was not a rounding error or an accidental mistake.”

He accused DoorDash of using what he called “greedy algorithms” that systematically failed to comply with the city’s pay law.

The Settlement Breakdown

The $131.5 million total breaks down as follows. Nearly $115 million goes directly to the 264,000 affected Dashers, with a median individual payment of approximately $48. DoorDash will also pay a $16.7 million civil fine to the city.

Beyond the financial terms, DoorDash agreed to submit detailed pay data to the city every month for three years, allowing regulators to monitor its compliance with pay law going forward.

DoorDash’s Explanation

DoorDash attributed many of the errors to technical and logistical complications rather than deliberate policy. The company said problems arose from deliveries that crossed city boundaries, orders with multiple pickup or drop-off locations, and deliveries that were partially fulfilled or canceled midway through.

Other errors, DoorDash said, resulted from technical software bugs or incomplete banking information on file for certain workers. The company said it has since fixed the technical issues that caused the miscalculations.

Part of a Broader Fight Over Delivery Worker Pay

The DoorDash settlement comes eight months after the city’s Department of Consumer and Worker Protection separately accused DoorDash and rival Uber Eats of using design tricks to deprive workers of more than $550 million in tips combined.

City officials at Tuesday’s press conference declined to say whether Uber Eats and Grubhub are now in compliance with the 2023 pay law. Uber declined to comment. Grubhub did not respond to a request for comment.

The three major delivery platforms have fought repeated legal battles with New York City in recent years, including challenges to tipping laws and disputes over whether they must share customer data with restaurants.

New York City’s 2023 minimum pay law for delivery workers was one of the first of its kind in the country and has been closely watched by other cities considering similar legislation. The DoorDash settlement strengthens the law’s enforcement record and sends a clear signal to other app-based delivery companies operating in the city.

What Affected Dashers Should Know

If you worked as a DoorDash delivery worker in New York City at any point covered by this investigation, you may be entitled to a payment from the $115 million worker relief fund.

DoorDash said it will contact affected Dashers directly with information about their individual payments. Workers who believe they are owed compensation but do not receive a notice should contact New York City’s Department of Consumer and Worker Protection or a worker rights attorney.

InjuryWatch News will continue tracking gig economy labor enforcement actions across the United States.