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DoorDash agreed to a $16.75 million settlement with the State of New York after getting caught pocketing drivers’ tips and misleading customers, Attorney General Letitia James’ office announced Monday, Feb. 24.
The food delivery giant cheated drivers out of their hard-earned tips between May 2017 and September 2019, using customer tips to cover base pay instead of paying them out to drivers as promised, an Office of the Attorney General (OAG) investigation found.
Customers were misled into thinking their tips would directly benefit the driver, when in reality, DoorDash was using the tips to reduce its own costs, James’ office said.
For example, if a “Dasher” was guaranteed $10 for an order and a customer tipped $6, DoorDash would only pay the remaining $4–meaning the tip didn’t actually go to the driver, James’ office said.
DoorDash also failed to clearly disclose the practice to customers and Dashers. In fact, at checkout, customers were shown a message that read, “Dashers will always receive 100 percent of the tip.”
“Delivery workers are integral to our communities, working tirelessly to bring food and other essentials directly to our doorsteps in all conditions,” James said. “This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward.”
Around 63,000 New York delivery drivers stand to benefit from the settlement. Eligible drivers will be contacted by an OAG settlement administrator via mail, email, and/or text, with payments expected to commence this spring.
In addition to the $16.75 million restitution fund, DoorDash must:
- Revise its pay model to ensure tips go directly to Dashers.
- Clearly disclose pay policy details to both Dashers and consumers.
- Provide Dashers with a full breakdown of base pay, promotions, and tips for every order.
- Give drivers access to their delivery history for at least four years—including deactivated workers.
Labor advocates praised the settlement, calling it a victory for delivery workers.
“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.”
The massive settlement comes on the heels of a similar agreement James’ office reached with alcohol delivery service Drizly in December 2024.
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