New York Attorney General Letitia James today announced a $16.75 million settlement with delivery platform DoorDash for misleading both consumers and delivery workers (known as “Dashers”) by using tips intended for Dashers to subsidize their guaranteed pay. Between May 2017 and September 2019, DoorDash used a guaranteed pay model that let Dashers see how much they would be paid before accepting a delivery. An Office of the Attorney General (OAG) investigation found that under this model, DoorDash used customer tips to offset the base pay it had already guaranteed to workers, instead of giving workers the full tips they rightfully earned. DoorDash will pay $16.75 million in restitution for Dashers and up to $1 million in settlement administrator costs to help issue the payments.
“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. My office will continue to protect New York workers from deceptive business practices and ensure they receive all of the money they’ve earned.”
The OAG investigation found that under DoorDash’s deceptive pay model, workers were only able to see their tips if they were greater than the amount DoorDash had already guaranteed to pay them for the order. DoorDash would always pay a minimum of $1 to the Dasher and would use the tips paid by the customer to offset the rest of the amount guaranteed to the delivery worker.
For example, for orders with a guaranteed amount of $10:
- If a customer tipped $0, DoorDash would pay $10 ($1 + $9 remainder). The Dasher received $10.
- If a customer tipped $3, DoorDash would pay $7 ($1 + $6 remainder). The Dasher still only received $10.
- If a customer tipped $6, DoorDash would pay $4 ($1 + $3 remainder). The Dasher still only received $10.
- If a customer tipped $9, DoorDash would pay $1 ($1 + $0 remainder). The Dasher still only received $10.
- If the customer tipped $11, DoorDash would pay $1 ($1 + $0 remainder).The Dasher only received $12.
Customers were misled into believing their tips would directly benefit Dashers. Instead, DoorDash would keep the tips meant for Dashers and take it out of their guaranteed pay. DoorDash would guarantee pay to a delivery worker, and then only actually pay them whatever the tip did not cover.
DoorDash also failed to clearly disclose these practices to customers and Dashers. At checkout, customers were encouraged to tip with a message reading “Dashers will always receive 100 percent of the tip.” Disclosures about the use of tips were buried in online documents and inaccessible during critical moments in the ordering process. Customers had no way of knowing that DoorDash was using tips to reduce its own costs.
Attorney General James has secured $16.75 million in restitution from DoorDash, which a settlement administrator engaged by OAG will distribute directly to Dashers affected by the deceptive pay model, providing them the compensation they were denied. Any worker who delivered for DoorDash between May 2017 and September 2019 in New York state may be eligible to file a claim for this settlement. During that period, New Yorkers placed more than 11 million delivery orders with DoorDash and approximately 63,000 New York delivery workers stand to benefit from this settlement. Payments are expected to begin in early 2025. Eligible drivers will be contacted by the settlement administrator via mail, email, and/or text with notices of the settlement and information on how to file a claim.
In addition to the restitution fund, DoorDash must:
- Revise Payment Practices: DoorDash is required to maintain a pay model that ensures consumer tips are paid to Dashers in their entirety, without impacting DoorDash’s contribution to guaranteed pay.
- Enhance Transparency: The company must clearly disclose pay policy details to both Dashers and consumers, and share a breakdown of base pay, promotional bonuses, and tips with Dashers for every delivery.
- Improve Dash History Access: Dashers, including those deactivated, will have access to their delivery history for at least four years.
“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. “And when you steal and lie at this scale, it’s systemic, it’s baked into your business model. And a business model that requires you to steal from workers and customers is a failure. Today, New York City sees what we’re up against and how much more work there is to do to fight back against the predatory labor practices that this industry is built on. But this also shows the collective power of workers and what we can accomplish when we’re united in solidarity with each other and with allies who are willing to hold exploiters accountable. Thank you Attorney General James for being a true friend to workers. And shame on you, DoorDash! While they lie and steal at scale, we are organizing at scale and building collective worker power. We are grateful to have the New York State Attorney General in this fight as we expand our efforts to hold these app companies accountable. We won’t stop fighting to ensure the dignity and respect these workers deserve.”
“Today, delivery workers in New York City can celebrate another victory in our fight for justice,” said Gustavo Ajche, Co-Founder of Los Deliveristas Unidos. “Since 2020, in the midst of the pandemic, when delivery workers began risking their lives to provide what New Yorkers needed, we also began organizing against the unjust working conditions imposed on us by delivery apps. Every right we have today we have had to fight for. We are grateful to have allies like the New York State Attorney General in this struggle for justice. The recovery of such a large sum of money represents not only the scale of exploitation that we face as workers but also the commitment of Attorney General James in seeing justice served for the working people of New York.”
“Today represents an important victory in our struggle to be treated with dignity by app companies that continue to exploit and abuse workers,” said Alejo G., an organizing leader with Worker’s Justice Project and Los Deliveristas Unidos. “Delivery workers perform one of the most dangerous jobs in New York City, providing essential goods to New Yorkers. On top of all the risks we face on the street and all the costs we incur, we shouldn’t have to worry about multi-billion-dollar companies stealing our wages and tips. As we continue to uncover the extent to which these companies prey on vulnerable workers, we are grateful to Attorney General James for supporting our rights and for putting DoorDash on notice that labor exploitation will not be tolerated in New York.”
“Greed – that’s what this case is all about," said William Medina, a delivery worker and organizer with Worker’s Justice Project and Los Deliveristas Unidos. "A company built on greed that has to steal tips from workers – and customers – to make its revenue and keep its investors happy, that is unjust. It’s unjust to the workers that put their lives on the line every day doing this work. And it’s unjust to the customers who meant to provide a tip to a hard-working deliverista instead of lining the pockets of executives at a billion-dollar company. Since 2020, Los Deliveristas Unidos has been organizing for our rights and to keep the app companies honest and transparent, because we continue to see an unfortunate pattern of such practices, including at DoorDash. Whether it’s stealing tips or making it harder for customers to tip after the minimum pay law went into effect, keeping workers in the dark about how they’re paid or why they’ve been suddenly deactivated – this is a company that operates on secrecy and a total lack of respect for workers and customers. We are grateful to Attorney General James for joining us in the fight and we once again call on DoorDash to do better by those who order food and those who deliver it.”
“I have been delivering for DoorDash since they started, but I do not work for them as much anymore because the system was not clear and they were taking our tips,” said Lee Vaughn, a Dasher with DoorDash since 2016. “DoorDash never told us accurate distances and the payment amount they would promise was not always true. They would show us an amount plus tips, but they were not telling us the truth. We worked hard and we deserve to be paid. I am thankful to Attorney General Letitia James and her office for getting us our money back.”
This is the latest of Attorney General James’ efforts to combat wage theft and deceptive business practices. In December 2024, Attorney General James recovered $4 million in withheld tips for former Drizly alcohol delivery workers. In September 2024, Attorney General James returned $750,000 in stolen wages to employees of cell phone company Best Wireless. In April 2024, Attorney General James secured nearly $230,000 for building employees cheated out of fair pay. In November 2023, Attorney General James recovered $328 million for Uber and Lyft drivers whose earnings were shortchanged for years. In August 2023, Attorney General James recovered $300,000 in unpaid wages for New York City nail salon workers. In March 2023, Attorney General James recovered $24,000 in stolen wages for former employees of a worker cooperative. In October 2022, Attorney General James secured $90,000 in stolen and unpaid wages for more than a dozen former employees of a commercial dry cleaner in Queens.
This matter was handled by Assistant Attorney General Lawrence Reina with assistance from Assistant Attorney Generals Jessica Agarwal and Kristen Ferguson under the supervision of Civil Enforcement Section Chief Fiona Kaye and Bureau Chief Karen Cacace, all of the Labor Bureau. Former Data Scientists Chansoo Song and Jasmine McAllister also assisted in this matter, under the supervision of Director Victoria Khan, Deputy Director Gautam Sisodia, and Former Director Jonathan Werberg, all of the Research and Analytics Department. The Labor Bureau is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.