NYC Mayor Mamdani Secures Record $131M Settlement with DoorDash for Underpaid Workers

The administration of New York Mayor Zohran Mamdani announced a landmark settlement on Tuesday, with New York City finalising a more than $131m agreement with DoorDash amid allegations that the delivery company underpaid its workers.

This marks the largest settlement for delivery workers in any city in the United States, set to affect 260,000 workers. Of the total amount, $115m will go directly to the workers, while $16m will be allocated toward civil penalties and other costs.

A nearly 70-page consent order, provided to Al Jazeera by the city’s Department of Consumer and Worker Protection (DCWP), revealed that the San Francisco, California-based delivery giant failed to pay some of its workers the minimum amount required by law between December 2023 and June 2026. The city anticipated that some of those underpayments would continue through November before corrective measures take effect, according to the order.

DoorDash confirmed that roughly $6.6m in payments never reached its delivery drivers and that there were more than $5.7m in late payments. A spokesperson for the company told Al Jazeera that it will notify affected workers in the coming weeks. The city echoed DoorDash’s statement, noting that it has already identified the affected workers using DoorDash’s records.

“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,” Mayor Zohran Mamdani stated at a news conference on Tuesday. The city government announced that underpaid workers would receive 200 percent of what they were originally owed.

“A worker who was owed $1,000 but received no payment will receive $3,000. A worker who was paid $1,000 later than allowed under the law will receive $2,000,” a news release detailing the settlement stated.

The city began cracking down on delivery driver underpayments under Mamdani’s predecessor, Eric Adams, whose administration established a first-of-its-kind minimum-pay rule for app-based delivery workers in 2023. Under this rule, delivery companies including DoorDash, Grubhub and Uber were required to meet a minimum pay rate for covered work, initially set at $17.96 per hour and scheduled to increase to $19.96 per hour by 2025.

Samuel Levine of the Department of Consumer and Worker Protection (DCWP) explained that the settlement stems from the Mamdani administration expanding its enforcement capabilities by increasing staff after taking office in January.

“What we’ve been able to show, particularly over the last nine months of the Mamdani administration, is that by investing directly and bringing in the best lawyers, investigators, data scientists, and economists to the government, we can cut through a lot of the noise, identify violations when they happen, and put money back in people’s pockets,” Levine told Al Jazeera.

New York is not the sole US city addressing delivery driver underpayments. Seattle, Washington has also adopted a minimum-payment system, utilising data from delivery platforms to enforce it since 2024. In August, Uber Eats agreed to pay nearly $4.4m to settle allegations of violating Seattle’s minimum-pay rules, impacting 14,000 workers. Seattle’s Office of Labor Standards (OLS) reported that Uber Eats failed to provide required minimum payments for cancelled orders and instances where pick-up or drop-off locations were outside city limits.