New York, NY – In a landmark settlement, New York Attorney General Letitia James announced that DoorDash will pay $16.75 million in restitution to delivery workers, known as “Dashers,” for misleading both customers and workers by using tips intended for Dashers to subsidize their guaranteed pay. The settlement resolves allegations that DoorDash’s payment practices between May 2017 and September 2019 deprived workers of the full tips they earned while deceiving customers who believed their tips were going directly to Dashers.
Deceptive Pay Practices Uncovered
An investigation by the Office of the Attorney General (OAG) revealed that DoorDash used a guaranteed pay model during this period, which allowed Dashers to see their earnings before accepting a delivery. However, the company used customer tips to offset the base pay it had already promised workers, rather than adding tips on top of their guaranteed earnings.
For example, if a delivery had a guaranteed pay of $10:
- If a customer tipped $0, DoorDash paid $10.
- If a customer tipped $3, DoorDash paid $7, and the Dasher still received only $10.
- If a customer tipped $9, DoorDash paid $1, and the Dasher still received only $10.
This practice meant that Dashers were effectively denied the full value of their tips, while customers were misled into believing their tips were directly benefiting workers.
“Delivery workers are integral to our communities, working tirelessly to bring food and other essentials directly to our doorsteps in all conditions,” said Attorney General James. “DoorDash misled customers who generously tipped and deceived Dashers who deserved to be paid in full. This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward.”
Approximately 63,000 New York-based Dashers who delivered for DoorDash between May 2017 and September 2019 are eligible to file claims for restitution. Payments are expected to begin in early 2025, with affected workers being notified via mail, email, or text.
Reforms and Transparency
In addition to the $16.75 million restitution fund, DoorDash has agreed to implement several reforms to its payment practices:
- Revise Payment Practices: Ensure that tips are paid to Dashers in full without reducing DoorDash’s contribution to guaranteed pay.
- Enhance Transparency: Clearly disclose pay policies to both Dashers and customers, providing a breakdown of base pay, tips, and bonuses for each delivery.
- Improve Dash History Access: Allow Dashers, including those deactivated, to access their delivery history for at least four years.
Worker advocacy groups celebrated the settlement as a significant victory in the fight for fair wages and transparency in the gig economy. “This settlement shows the scale at which DoorDash steals from its workers and lies to its customers,” said Ligia Guallpa, Executive Director of Worker’s Justice Project and Co-founder of Los Deliveristas Unidos. “We are grateful to Attorney General James for holding DoorDash accountable and standing with workers in this fight.”
Gustavo Ajche, Co-Founder of Los Deliveristas Unidos, added, “Today, delivery workers in New York City can celebrate another victory in our fight for justice. Every right we have today, we have had to fight for. This settlement represents the scale of exploitation we face and the commitment of Attorney General James to seeing justice served.”
This settlement is the latest in a series of actions by Attorney General James to combat wage theft and deceptive business practices. In recent years, her office has recovered millions in stolen wages for workers across various industries, including Uber and Lyft drivers, nail salon employees, and alcohol delivery workers.
