Yet another settlement in the ongoing saga. Last month, New York City Mayor Zohran Mamdani announced a $131.5 million accord with DoorDash over what the city described as the mispayment of delivery-driver wages in the Big Apple. The arrangement expands on earlier settlements reached this year with other platforms, all as part of Mamdani’s “New Era of Accountability” for gig-economy firms.
The concrete details tell a somewhat more modest story. While DoorDash did underpay a subset of workers, the typical sums at stake were not large. In fact, the majority of the settlement arose from a dispute about precisely how to calculate driver wages under NYC’s minimum-wage rule for gig work, rather than from outright wage theft.
Mamdani may cast himself as a roaming enforcer of the gig economy, but in this settlement he largely appeared to step in front of a parade that had already started. The dispute traces back to 2023—well before Mamdani took office—when the city first opened an inquiry into DoorDash for alleged underpayment of drivers under the city’s minimum-wage law for gig work. City staff reviewed 152 million DoorDash transactions during the investigation, which only concluded this year.
The headline figure of $131.5 million merits a closer look as well. Of that total, $12.3 million pertains to delivery drivers who were underpaid or paid late. DoorDash contends that many of these underpayments were caused by technical issues within the app or by more complex deliveries that crossed city boundaries or were canceled mid-journey. In other cases, drivers themselves supplied inaccurate banking information to the company.
The lion’s share of the settlement—$83 million—stemmed from disagreement over how exactly to compute driver pay. Under city law, for instance, drivers must be compensated for so-called “idle time” between deliveries, but DoorDash disputed whether the government’s rules would apply to drivers who spent part of that time outside the city’s limits (for example, in New Jersey). DoorDash argues that its method was “fair, practical, and legal,” but nonetheless chose to settle “rather than spend years arguing about whose method was correct.”
Admittedly, some drivers were significantly affected by DoorDash’s underpayments, with the city reporting that 700 workers were owed more than $10,000 each. “Plainly, we messed up,” the company stated. “While these mistakes weren’t intentional, that doesn’t excuse them.”
Yet it is worth noting that fewer than 1 percent of payments to delivery workers were impacted. Sixty-five percent of the affected drivers were underpaid by $1 or less (though DoorDash will provide each affected driver a minimum of $10 regardless). The average underpayment stood at $7.70, and the median payout to drivers will be $48.
This did not stop Mamdani from declaring: “City Hall will not sit idly by while a megacorporation that earned nearly a billion dollars in profits last year rips off the workers who keep our city moving.”
What Mamdani’s statement obscures is the conflation of actual underpayments with the earlier dispute over NYC’s wage formula. As the Manhattan Institute’s Santiago Vidal noted: “Mamdani blended the admitted cases of payment failure with the contested on-call calculation into a broad anti-capitalist narrative—and labeled it corporate wage theft.”
Not all of the settlement money is funneled to drivers. More than $16 million from the settlement will be directed to the city’s coffers in the form of penalties. Of this, $4.3 million is allocated to a compliance fund that will support the Workers Justice Project, a New York labor-interest group, as well as Princeton’s pro-union Workers’ Algorithm Observatory.
Mamdani’s DoorDash settlement mirrors elements of the city’s earlier agreement with UberEats. In that case, which preceded Mamdani’s actions, the city itself conceded that Uber Eats had been “mostly compliant” with the law and that underpayments resulted from canceled orders. Nevertheless, in the settlement announcement, Mamdani again seized the moment. “If you break the law and profit from exploitation,” he said, “you will be held accountable, swiftly and directly.”
Mamdani’s approaching rhetoric also ignores the broader consequences of NYC’s minimum-wage law for delivery work, which have been felt by both consumers and workers in Gotham. Since the law took effect, the number of delivery drivers in the city declined, delivery costs rose, and about 27,000 New Yorkers were shut out of the delivery market altogether as platforms shifted toward “arranged scheduling” models.
During his tenure, Mamdani has shown a knack for recasting investigations already underway—and legitimate debates about wage formulas—into narratives of cracking down on corporate greed and wage theft. He has proven especially adept at messaging, which makes it even more essential for New Yorkers to scrutinize the details before embracing this policy.
