DoorDash to pay $16.75 million over stolen tips from delivery drivers

MANHATTAN (CN) — DoorDash agreed to pay $16.75 million to settle a probe from New York Attorney General Letitia James, who found that the meal delivery giant had been shorting its drivers out of tips with deceptive payment practices, James’ office announced Monday.

James had first started investigating DoorDash in 2021 amid complaints from drivers that they were not receiving the tips they were rightfully owed based on the company’s payment system from 2017 to 2019. On Monday, James announced that her probe revealed DoorDash was using tips from customers to subsidize the base pay that they had already guaranteed workers.

“It was basically a bait-and-switch where customers thought they were supporting delivery workers, but instead they were subsidizing DoorDash instead,” James said at a press conference Monday. “Today, we are holding DoorDash accountable.”

James said that the scheme operated using DoorDash’s minimum payment system, in which “Dashers” are guaranteed a certain amount of money for delivering each order. But instead of getting customer tips on top of that minimum amount, James’ investigation found that DoorDash would use the tip money to fulfill the order minimum.

For example, if a driver is guaranteed $10 for an order, DoorDash’s policy makes the company responsible for ensuring that the driver gets that $10 — if a customer tips nothing, then DoorDash pays out the $10 to the driver. But if a customer tips $5, the delivery driver may still only receive that $10 minimum; DoorDash would have to pay less out of the company’s dime to ensure that the driver hits the minimum.

According to James, this system was not made adequately clear to customers, who were misled into believing that drivers earned a minimum pay per order, plus tips.

“At checkout, customers were encouraged to tip with a message reading ‘Dashers will always receive 100 percent of the tip,’” James’ office said in a Monday press release. “Disclosures about the use of tips were buried in online documents and inaccessible during critical moments in the ordering process. Customers had no way of knowing that DoorDash was using tips to reduce its own costs.”

The settlement money will go to New York delivery workers, more than 60,000 of which will be eligible to collect from the $16.75 million pot.

“I urge all of you to file a claim,” James said Monday.

DoorDash will also have to be committed to changing its business practices. Going forward, James said that the company will need to check in with her office to ensure that it is paying out the entirety of customer tips to drivers without reducing drivers’ base pay.

DoorDash says that this has been the case ever since the company updated its payment model in 2019, however.

“We remain committed to making sure that Dasher earnings are always fair and transparent, and the allegations settled were related to an old pay model that was retired in 2019,” the company said in a statement on Monday. “To be clear: Dashers always keep 100% of tips from orders on the DoorDash app. While we believe that our practices properly represented how Dashers were paid during this period, we are pleased to have resolved this years-old matter and look forward to continuing to offer a flexible way for millions of people to reach their financial goals.”

The company will also need to clearly disclose pay policy details to consumers and delivery drivers and share a breakdown of pay for each delivery, as well as provide drivers with access to their delivery history dating back at least four years, according to the settlement.

DoorDash is the largest food delivery app in the country. Its most recent quarterly report revealed that it processed 685 million orders worth $21.3 billion in 2024.

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