More than 60,000 DoorDash delivery workers will share the company's $16.75 million settlement, New York AG says

Core Points - DoorDash will pay a $16.75 million settlement to resolve a probe into its tipping practices, affecting approximately 60,000 delivery workers, known as "Dashers," with individual payouts ranging from$10,000 to $14,000 [1][5] - The investigation revealed that DoorDash used customer tips to offset the wages paid to Dashers, misleading both customers and workers about the true nature of the tipping system [2][3][5] - The settlement mandates that DoorDash must cease its tip-sharing practice and improve transparency regarding how tips are handled, with compliance reports required every six months for the next three years [4] Summary by Sections Settlement Details - The total settlement amount is$16.75 million, which will be distributed among around 60,000 Dashers, resulting in payouts between $10,000 and$14,000 per worker [1][5] Tipping Practices - DoorDash's practice involved using tips to reduce the company's financial responsibility for paying Dashers, which was not disclosed to either the Dashers or the customers [2][3] - An example highlighted by New York Attorney General Letitia James illustrated that if a Dasher was guaranteed $10 for a delivery and received a$3 tip, DoorDash would only pay $7, effectively using the tip to lower its own costs [2] Company Accountability - Communications among DoorDash executives indicated awareness of the deceptive nature of their tipping policy, with concerns that Dashers might eventually discover the truth [3][4] - The settlement requires DoorDash to establish a website for Dashers to claim their settlement funds and to report on compliance with the new transparency requirements [4]