DoorDash shares rise after $131.5 million NYC settlement

DoorDash shares rose 2.98% intraday after the company agreed to a $131.5 million settlement with the New York City Department of Consumer and Worker Protection. The deal resolves findings that the company underpaid delivery workers or made late payments.

The settlement provides nearly $115 million in financial relief for about 264,000 delivery workers and includes a $16.7 million fine. Within that relief package, $83 million settles a dispute regarding pay for workers logged into the app and on-call without actively delivering, while $12.3 million addresses missed or delayed payments.

DoorDash estimated the median payout to workers at about $48. The company stated it has corrected the technical issues behind the payment errors, citing factors such as cross-boundary deliveries, multi-stop orders, canceled trips, software bugs, and incomplete banking details.

New York City had previously accused both DoorDash and Uber Eats of design tricks that withheld over $550 million in tips. Uber's portion of the inquiry remains unresolved, and app-based delivery services including Grubhub have faced ongoing disputes with the city over tipping laws and data-sharing rules.