DoorDash will pay $131.5 million to settle claims that the company underpaid delivery workers in New York City.

Mayor Zohran Mamdani announced the agreement Tuesday, calling it the largest worker settlement in the city’s history. The deal also adds a monitoring system designed to track DoorDash’s compliance with New York City delivery worker pay laws.

Most of the $131.5 million settlement will go to more than 260,000 delivery workers, according to City Hall. These workers were allegedly underpaid, paid late, or did not receive payment for certain deliveries. DoorDash will also pay about $16 million to New York City for civil penalties and other costs.

Mamdani said workers should receive the wages they earn in full and on time. He added that the settlement will return money to workers affected by DoorDash’s payment issues.

DoorDash also acknowledged the problems. In a statement, the company said, “Simply put, we screwed up.” It added that the mistakes were not intentional but said that did not make them acceptable. The company also stated, “Dashers should be paid in full, on time, every time.”

DoorDash Cites Payment Errors

Instagram | yahoofinance | A $131.5 million settlement will largely go to over 260,000 delivery workers affected by wage violations.

DoorDash said several payment problems came from technical bugs or complicated delivery situations. These included deliveries that crossed city boundaries, involved multiple pickup or drop-off locations, or were canceled or only partly completed.

The settlement will also place DoorDash under a new monitoring system. The system aims to help ensure the company follows New York City’s delivery worker pay requirements going forward.

This is not DoorDash’s first major payment-related settlement in New York. Last year, the company agreed to pay nearly $17 million to resolve claims that it used customer tips to help cover delivery workers’ wages. The claims alleged that workers did not receive their tips on top of their guaranteed pay.

The latest agreement combines worker compensation, city penalties, and additional oversight. For more than 260,000 affected workers, most of the settlement is expected to address past payment problems. For the city, the monitoring requirement adds another layer of oversight over DoorDash’s delivery pay practices.

The agreement also highlights the importance of accurate and timely wage payments for workers covered by New York City’s delivery labor rules.