A years-long scandal affecting DoorDash delivery gig workers has finally come to an end.
Food delivery giant DoorDash has been caught red-handed shortchanging its workers, using customer tips to subsidize wages instead of allowing drivers to pocket them. According to the Associated Press the company has agreed to fork over nearly $17 million to settle claims, which New York Attorney General Letitia James announced on February 24.
For years, @DoorDash cheated its delivery workers by using customers' tips to meet its workers’ guaranteed pay instead of giving them the tips they earned.
— NY AG James (@NewYorkStateAG) February 24, 2025
Today, we're making DoorDash pay $16.75 million that will go back into the pockets of tens of thousands of workers. pic.twitter.com/hkVsSMBlGV
James didn’t hold back, calling out DoorDash for deceiving both workers and customers. The company’s shady pay model, used between May 2017 and September 2019, promised delivery drivers a base rate per order. However, behind the scenes, customer tips were quietly offsetting the company’s costs instead of being added to driver earnings.
“This is just fundamentally unfair,” James declared during a fiery press conference in Manhattan. She emphasized that customers had no clue their generous tips weren’t actually boosting worker pay, but were instead helping the multi-billion-dollar company pad its bottom line.
As part of the settlement, DoorDash will shell out $16.75 million in restitution to affected New York workers. Delivery drivers who made trips during the affected years will soon be contacted by a settlement administrator to claim their share of the payout.
Despite agreeing to the massive payout, DoorDash isn’t exactly waving a white flag. In a statement released following news of the multi-million dollar settlement, the company defended its past actions.
“While we believe that our practices properly represented how Dashers were paid during this period, we are pleased to have resolved this years-old matter and look forward to continuing to offer a flexible way for millions of people to reach their financial goals,” the statement read.
DoorDash insists it has since changed its pay structure, but critics argue that this case is just another example of the ongoing exploitation of gig workers. The controversy follows a string of similar scandals, including the high-profile Uber case that exposed how drivers were struggling to make ends meet without proper benefits like healthcare. That case, which gained momentum around 2020, led to major legal battles over worker protections and the classification of gig economy laborers in California and other states.
In yet another major win for gig workers, Attorney General James secured a staggering $328 million settlement in November 2023 after an investigation found that Uber and Lyft had withheld earnings and failed to provide essential benefits to their drivers.