DoorDash to Pay $16.75 Million Settlement to 60,000 Delivery Workers

DoorDash has reached a settlement in a lawsuit with New York, where more than 60,000 DoorDash delivery workers will benefit from a $16.75 million payout, according to New York officials. This resolution comes in response to an investigation into DoorDash's deceptive tipping practices, with each driver expected to receive between $10,000 and $14,000 from the settlement.

Deceptive Tipping Practices

New York Attorney General Letitia James disclosed that DoorDash had been using tips to supplement driver salaries, misleading both customers and workers. The company would adjust driver payments based on the amount of tips received, without informing customers or drivers about this practice.

Details of the Settlement

The $16.75 million settlement will be distributed among approximately 60,000 DoorDash delivery workers, commonly referred to as "Dashers." Each worker is set to receive a portion of the settlement amount, averaging between $10,000 and $14,000 per individual. The investigation revealed that DoorDash's approach to tip distribution was not transparent, leading to concerns about fair compensation for drivers.

Reforms and Accountability Measures

As part of the settlement agreement, the New York Attorney General's office will establish a dedicated website for Dashers to claim their entitled funds. DoorDash is mandated to discontinue the practice of tip offsetting and enhance transparency regarding tip handling procedures. Over the next three years, DoorDash will be obligated to submit biannual reports to the AG's office to ensure compliance with the new regulations.

Despite attempts to reach a DoorDash spokesperson for comments on the settlement, no immediate response was received.

This development underscores the significance of fair labor practices and transparent compensation policies within the gig economy sector. By holding companies like DoorDash accountable for their practices, regulatory authorities aim to safeguard the rights and earnings of delivery workers.

For more updates and news, visit Business Insider's website.

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By: litaliano@insider.com (Laura Italiano)
Title: DoorDash to Pay $16.75 Million Settlement to 60,000 Delivery Workers
Sourced From: www.businessinsider.com/doordash-pay-16-million-settlement-deceptive-tip-practices-2025-2
Published Date: Mon, 24 Feb 2025 20:42:34 +0000