New York Attorney General Letitia James has reached a $16.75 million settlement with DoorDash, resolving claims that the delivery platform misled consumers and delivery workers by using tips intended for workers to subsidize their guaranteed pay. The investigation by the Office of the Attorney General (OAG) revealed that between May 2017 and September 2019, DoorDash used a pay model that allowed them to offset their base pay with customer tips instead of passing the full amount to Dashers.
"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."
Under this model, DoorDash ensured a minimum payment of $1 per order, using customer tips to cover the remainder of the guaranteed amount. This led customers to believe their tips were going directly to Dashers when they were actually reducing DoorDash's own contribution.
The settlement includes $16.75 million in restitution for affected Dashers and up to $1 million for settlement administration costs. Eligible workers who delivered for DoorDash during the specified period in New York state will be contacted about filing claims.
Additionally, DoorDash is required to revise its payment practices, ensuring consumer tips are fully paid out without affecting guaranteed pay contributions from DoorDash. The company must also enhance transparency regarding its pay policies and provide detailed breakdowns of earnings for each delivery.
"This settlement shows the scale at which DoorDash steals from its workers and the scale at which it lies," said Ligia Guallpa, Executive Director of Worker’s Justice Project and Co-founder of Los Deliveristas Unidos.
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."
The case was managed by Assistant Attorney General Lawrence Reina with support from other members of the Labor Bureau under Chief Deputy Attorney General Meghan Faux's leadership.