DoorDash to pay $131.5m over New York delivery wages
Most of the settlement — $83m — turns on how the company paid drivers for time spent waiting between orders. Any startup running a gig model now knows what regulators count as working time.
DoorDash has agreed to pay $131.5m (£99m) to New York City regulators after admitting it failed to pay thousands of delivery workers correctly or on time.
The agreement with the Department of Consumer and Worker Protection follows a city investigation into wage violations.
The largest single component is $83m. That covers a dispute over how the company calculated pay for the time workers spend logged into the app between deliveries.
Idle time is the fault line. Delivery apps have historically paid only for active deliveries, while New York's rules require payment for all time a worker is logged in.
The San Francisco company blamed changes to New York state's minimum wage introduced in 2023. Under that standard, pay for app-based delivery workers varies by county, by tipping arrangements and by how many people the employer engages.
DoorDash also pointed to technical faults and multi-stop delivery routes as causes of underpayment and late payment. It says it has fixed the software bugs behind the errors.
On the company's account, the errors affected roughly 264,000 workers but fewer than 1% of its transactions in the city.
Systemic errors meant about $6.6m in wages never reached workers at all. A further $5.7m arrived days or weeks late.
DoorDash says local workers earn roughly $30 per active hour on average.
The case is part of a longer argument between delivery platforms and city government. Uber Eats and Grubhub have both clashed with New York officials over tipping rules, minimum pay and data sharing.
For any founder building a marketplace that pays people by the task, the settlement is a specification rather than a headline. It names the practices a regulator will treat as underpayment: paying only for active time, letting county-level rate rules drift out of a payroll system, and treating multi-stop routes as a single unit of work.
It also sets a price on delay. Paying the right amount late cost DoorDash a place in the same settlement as paying too little, and $5.7m of the wages at issue were simply slow.
The cheapest moment to audit a pay engine against local wage law is before a city does it. DoorDash's bill for doing it afterwards was $131.5m.
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