$131.5 million DoorDash settlement announced by Mayor Zohran Mamdani after app admits ‘we screwed up’

New York City has spent years trying to make sure delivery workers are paid properly. Mayor Zohran Mamdani has also made worker protections a focus of his administration. On Tuesday, his office announced a major agreement with DoorDash.

DoorDash will pay $131.5 million to settle claims it underpaid delivery workers. City officials called it the largest worker settlement in the city’s history. The deal also puts DoorDash under a new monitoring system. That system will check the company’s compliance with the city’s delivery worker pay laws going forward.

Most of the settlement money will go straight to workers. More than 260,000 people were underpaid, not paid, or paid late for their deliveries, according to City Hall. DoorDash will also pay about $16 million in civil penalties and other costs to the city.

More than 260,000 workers were affected

Mamdani framed the settlement as a matter of basic fairness. “When a worker earns a wage, they deserve to be paid that wage – not tomorrow, not after a lawsuit, but on time and in full,” he said in a statement. “DoorDash underpaid more than 260,000 workers, and today we are getting that money back.” DoorDash acknowledged the payment errors in a statement, saying, “Simply put, we screwed up.”

DoorDash also called its own performance unacceptable. “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,” DoorDash said.

According to the company, many of the payment errors traced back to technical bugs or complicated delivery situations. Some involved deliveries that crossed city boundaries or had multiple pickup or drop-off spots. Others were canceled or only partially completed.

This is not DoorDash’s first payout tied to how it treats drivers in New York. A DoorDash driver once complained that a customer’s 20% tip wasn’t enough. Last year, DoorDash agreed to pay almost $17 million in a separate case involving driver tips. That case involved using customer tips to subsidize driver pay, instead of letting workers keep tips too.

Questions about DoorDash driver pay have surfaced in different ways. Tuesday’s settlement, however, puts a much larger figure behind the issue, with more than $115 million set to go directly to affected workers.

The new monitoring requirements will give the city a way to track DoorDash’s compliance going forward.