DoorDash has reached a settlement with New York City’s Department of Consumer and Worker Protection (DCWP) over compliance with the pay rules for delivery workers.
Simply put, we screwed up. Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren’t intentional, that doesn’t make them okay. We pride ourselves on operational excellence at DoorDash – and this was not excellent, nor was it acceptable. Dashers should be paid in full, on time, every time. We are sorry to the Dashers we let down.
We’re making things right by paying every impacted Dasher what they are owed and fixing what caused this so it doesn’t happen again. The $131.5 million settlement with the City includes $12.3 million for Dashers who were underpaid or paid late and over $83 million to resolve a disagreement over how to calculate pay for time Dashers spend online between deliveries. DCWP is receiving $16.7 million in fines owed to them as part of the settlement.
What went wrong with Dasher payments?
New York City has the most complex earning standard for delivery workers in the country. Since it took effect in 2023, New York City Dashers have earned more than $1 billion and the average Dasher pay per active hour before tips is roughly $30.
Despite our best efforts to comply with the new rules, we made mistakes. Many errors were caused by technical bugs or happened in complicated situations: deliveries that crossed city boundaries, had multiple pickup or drop-off locations, or were only partially fulfilled or cancelled. In other cases, errors stemmed from Dashers providing incomplete or inaccurate banking information.
Approximately 264,000 Dashers will receive a payment, including 209,000 for missing or late payments. Less than 1% of all payments to NYC Dashers were affected. Around $6.6 million worth of payments never reached Dashers, and another $5.7 million arrived days or in some cases, weeks late. The average missing payment owed to Dashers is $7.70, and 65% of impacted Dashers were underpaid by $1 or less, and the median payment will be around $48.
What is on-call or online time?
Most of this settlement isn’t about late or missing pay, but how to calculate bonuses paid to Dashers for online or on-call time — the hours a Dasher is logged into the app but not on an active delivery. Under the City’s rules, Dashers must be paid for this time spent online between deliveries, and they were. We calculated on-call time differently than the City, and believe our approach was fair, practical, and legal. But rather than spend years fighting over whose method was right, we chose to pay Dashers sooner and use the City’s method going forward.
What we’re doing about it
We’re paying every impacted Dasher what they earned, and all affected Dashers will be contacted to be made whole in the coming weeks. Dashers will be paid a minimum of $10, even if they were underpaid by less than that.
We’ve fixed the technical issues that caused these errors, including better validation of banking information to ensure we catch issues before it causes a missed payment, and we’ve strengthened our compliance program to help prevent this from happening again.
This settlement reflects the responsibility we take for falling short. We’ve been working to finalize this for some time and already set aside the full amount in prior quarters.
If you have additional questions about our settlement and whether you have been impacted, visit our Help Center here.
DoorDash (NASDAQ: DASH) is one of the world’s leading local commerce platforms that helps businesses of all kinds grow and innovate, connects consumers to the best of their neighborhoods, and gives people fast, flexible ways to earn. Since its founding in 2013, DoorDash has expanded to more than 40 countries, using technology and logistics to shape the future of local commerce and broaden access to opportunity. With a growing international presence that now includes Deliveroo and Wolt, DoorDash combines global scale with local expertise to serve communities around the world.
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events, and such statements in this communication include, but are not limited to, expectations regarding the impact of DoorDash’s settlement with the City of New York and the company’s technical and operational changes made in connection therewith; and expectations regarding DoorDash’s financial position and financial and operating performance. Expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. For information on potential risks and uncertainties that could cause actual results to differ from any results predicted, please see DoorDash’s most recent Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q, each filed with the Securities and Exchange Commission.
