DoorDash agrees to a $131.5M settlement with NYC's DCWP to resolve a year-plus investigation into its compliance with the city's 2023 delivery driver pay law

You will receive a payment from DoorDash if you were a delivery driver in NYC and were underpaid or paid late.

DoorDash has agreed to a $131.5 million settlement with New York City's Department of Consumer and Worker Protection (DCWP) to resolve a year-long investigation into its compliance with the city's 2023 delivery driver pay law. The company admitted to making mistakes that resulted in some delivery workers, known as Dashers, being underpaid or paid late. The settlement includes $12.3 million for underpaid or late payments to Dashers, with the average missing payment being $7.70 and 65% of affected Dashers being underpaid by $1 or less. A significant portion of the settlement, over $83 million, addresses a dispute over how DoorDash calculated pay for time Dashers spend online between deliveries. The company will pay $16.7 million in fines to the DCWP. DoorDash stated that technical bugs and complex delivery situations contributed to the errors, and that it has since fixed these issues and strengthened its compliance program.

The substantial settlement amount, particularly the over $83 million allocated to resolve the dispute over 'on-call' time pay, indicates a significant divergence between DoorDash's interpretation of the law and the DCWP's enforcement priorities. This suggests that future regulations may need to provide clearer definitions for compensating gig workers during non-delivery periods to avoid protracted legal battles.

This case underscores the increasing regulatory scrutiny on gig economy platforms and the complexities of complying with varying local labor laws. Companies operating in multiple jurisdictions may face greater challenges and costs in ensuring consistent compliance, potentially leading to a reassessment of operational strategies and technology investments.