On February 24, 2025, the Office of the Attorney General of the State of New York (“OAG”) and New York Attorney General (“AG”) Letitia James announced that DoorDash has agreed to pay $16.75 million in backpay following an investigation by the OAG into the company’s pay practices of its delivery drivers, known as “dashers.”
From May 2017 to about September 2019, according to the AG, DoorDash would promise a minimum monetary amount to dashers for completing a delivery but use customers’ tips to subsidize the workers’ guaranteed base pay. For example, for orders with guaranteed pay of $10, if a customer tipped $3, the company would pay $7 to the dasher. Dashers had no way of knowing that DoorDash was using tips to reduce its own costs, as disclosures about tipping were buried in online documents.
During the relevant period, New Yorkers placed more than 11 million delivery orders with DoorDash, and about 63,000 dashers are expected to benefit from the settlement. As part of the resolution, the OAG is asking DoorDash to revise its payment practices so that tips do not subsidize guaranteed pay. The company must also provide a breakdown of every order payment, including base pay, promotions, and tips, and add disclosures about its revised payment practices to consumers on its website and mobile app. Lastly, DoorDash will pay as much as $1 million in administrative costs to help issue the payments to workers eligible to benefit from the settlement payout.
DoorDash maintains that the allegations in question are related to an old pay model that was retired in 2019, and that dashers always keep 100% of tips from orders on their platform. The New York resolution follows a similar $2.5 million settlement reached in 2020 with then-DC AG, Karl Racine, who also alleged the company misled consumers and used tips left for workers to boost the company’s bottom line.