New York City is home to over 60,000 app-based food delivery drivers. It was also the first U.S. city to offer app-based food delivery drivers minimum wage, a precedent that followed years of complaints from underpaid workers. Shortly before New York City established the minimum wage, DoorDash announced its hourly pay system “Earn By Time,” which some argue pays less than the original model depending on your location. Now DoorDash is in hot water with the City of New York for reportedly cheating delivery workers (Dashers) out of tips. The company was hit with a $16.75 million settlement after an investigation found that DoorDash was misleading Dashers and customers. Between May 2017 and September 2019, DoorDash used tips meant for Dashers to subsidize its guaranteed pay model, which gives an order’s total before it’s accepted. 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. In addition to the $16.75 million in restitution for Dashers, DoorDash must pay an additional $1 million to help administer the payments.
