DoorDash agrees to $131 million settlement with New York over tip shortfalls
DoorDash will pay $131 million to resolve a dispute with New York City alleging it underpaid tips to its delivery workers.
New York City’s consumer-protection agency accused DoorDash and Uber Eats of depriving delivery workers of over $550 million through flawed tipping mechanisms, prompting a legal showdown. DoorDash acknowledged errors, attributing them to software bugs and complicated deliveries that crossed borough lines or involved multiple stops. The company will disburse $131 million, with $12.3 million earmarked for drivers who received insufficient or late tips, $83 million to settle a disagreement over how on-line time is compensated, and the balance to cover municipal penalties.
DoorDash estimates the average missed payment was $7.70, with a median of $48, affecting roughly 264,000 couriers citywide. While the settlement resolves the case, the firm stresses that the issue impacted less than 1% of its New York workforce. Officials highlighted that average tips fell from $3.66 to under $1 after new city rules took effect.
Why it matters
The deal highlights how gig-economy firms handle worker pay and the role of city regulation in protecting delivery workers.
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