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DoorDash pays more than $83m to settle how it counted time Dashers spend between deliveries
New York's enforcement action against DoorDash totals $131.5 million, and the company says over $83 million of it settles one question about which idle minutes count as paid on-call time. More than 260,000 workers share the payout.
The Product Desk · Product desk
What happened
- New York City said DoorDash will pay $131.5 million in an enforcement action for violating the city's minimum wage and delivery work protection laws.
- DoorDash said on its own site that over $83 million of the total resolves a disagreement over how to calculate pay for time Dashers spend online between deliveries.
- The city said more than 260,000 affected workers will share more than $115 million, compensated at approximately 200 percent of the amount they were underpaid.
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Why it matters
- cost The disputed definition cost more than everything else combined: about $48.5 million covers the late payments and the penalties, against over $83 million for how idle time was counted.
- constraint Future changes to how the app decides a Dasher is idle have to survive a regulator reading the output every month. That raises the cost of experimenting with dispatch timing.
- exposure If workers hold their own copies of what the app displayed, any gap between the displayed figure and the paid figure becomes provable by the other side, using evidence the platform does not control.
- precedent DoorDash adopted the city's definition while maintaining its own was legal, so New York's reading of on-call time becomes the working standard there without a court deciding whose calculation was right.
A Dasher has the app open, no offer on the screen and nothing in the car. New York calls that on-call time, and DoorDash's own settlement announcement says the law requires that workers "must be paid for this time spent online between deliveries" [6].
The settlement stacks two different failures in one number. The first is engineering. DoorDash attributed missing and late payments to technical issues and to orders that "crossed city boundaries, had multiple pickup or drop-off locations or were only partially fulfilled or cancelled" [5], which are edge cases in the order record, the kind a backfill fixes. The second is a definition. Deciding how to count time online between deliveries is a spec decision, and DoorDash said its approach was "fair, practical and legal" while choosing to follow the city's guidance instead of fighting in court [7]. On the late and missing payments, Engadget reported, the company was willing to admit in its own words that it "screwed up" [10].
More than $115 million spread across more than 260,000 workers is about $442 each [1]. The city set compensation at roughly 200 percent of what each worker was underpaid [4], so the average shortfall behind that payment is around $221 [2]. Both city figures are given as minimums, so read $442 as an approximate mean, not a per-worker entitlement.
The remedies land in the app. DoorDash agreed to send the Department of Consumer and Worker Protection monthly data for three years, update the app, and adopt internal controls so workers are not offered deliveries unless they are compensated for on-call or trip time [8]. That last item constrains the offer flow itself.
The Workers' Algorithm Observatory and the Workers' Justice Project have committed to building software to let workers capture the information DoorDash shows them about their deliveries and pay [9]. That puts a copy of the screen outside the platform.
Engadget notes that DoorDash and other delivery companies have generally pushed back on city and state regulation of their platforms, down to a law that would require suggesting a customer tip at checkout [11]. This enforcement action names DoorDash and New York City; no similar action against another platform appears in the record.
For anyone whose product computes what a person earns, the exercise is a two-column list. Column one: every state a user can be in where money depends on a clock. Column two: the states where the user can see that clock and rebuild the figure from what the app showed them. The rows in column one that are missing from column two are where New York found $83 million.
What to watch
- What DoorDash's monthly data filings to the DCWP show about on-call time during the three-year monitoring period.
- Whether the Workers' Algorithm Observatory and Workers' Justice Project capture software ships, and what it shows about displayed pay against paid pay.
- Whether another city applies New York's reading of time online between deliveries to a delivery platform.