DoorDash to Pay $17 Million in Settlement
New York Attorney General Letitia James announced a $16.75 million settlement with DoorDash after an investigation revealed the company misled consumers and delivery workers by using customer tips to subsidize wages instead of paying them fully to drivers, known as Dashers. The alleged wage model was used between May 2017 and September 2019.
How DoorDash Used Driver Tips
Court filings show that DoorDash factored tips into workers’ base pay, meaning that customers’ gratuities were not always additional earnings but rather replaced part of the guaranteed payment DoorDash had already promised.
“This is just fundamentally unfair,” James said in a press conference in Manhattan. “Customers had no reason to believe that these tips were being used by DoorDash to reduce its costs.”
DoorDash Responds
DoorDash acknowledged the settlement but maintained that its practices were transparent.
- A DoorDash spokesperson told USA TODAY that the allegations were related to an old pay model retired in 2019.
- “While we believe our practices properly represented how Dashers were paid during this period, we are pleased to have resolved this years-old matter and look forward to continuing to offer a flexible way for millions of people to reach their financial goals.”
What the Settlement Means for Dashers
Under the agreement, Dashers who made deliveries in New York between 2017 and 2019 are eligible for restitution.
- The $16.75 million settlement will be distributed among impacted workers.
- A settlement administrator will contact eligible Dashers.
- Details on how to file a claim will be posted in the coming weeks.
James emphasized that delivery workers are integral to communities, often working in harsh conditions to provide essential services.
“This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward,” she added.
How to File a Claim
The New York Attorney General’s Office will soon provide details on how eligible workers can claim their settlement share. A website will be set up with instructions, and Dashers are urged to check for updates.
“If you were a Dasher or delivery worker in New York between 2017 and 2019, you may be entitled to restitution,” James said. “We have your back.”
Final Takeaway
While DoorDash has moved past this pay model, this settlement highlights the need for corporate transparency in the gig economy. Dashers and consumers alike should be aware of how tips and wages are calculated when using delivery platforms.
For more information on the settlement and eligibility, visit the New York Attorney General’s website or follow updates from DoorDash and legal authorities.
