DoorDash to pay New York delivery workers nearly $17M for using tips to subsidize wages

Core Points - DoorDash will pay nearly $17 million in a settlement for using customer tips to subsidize delivery workers' wages instead of allowing them to keep the full tips [1][5] - The New York Attorney General criticized DoorDash's practices as fundamentally unfair, stating that customers were misled about how their tips were used [1][7] - The settlement includes $16.75 million in restitution for eligible DoorDash workers who made deliveries between May 2017 and September 2019 in New York [5][7] Payment Model - Under the previous pay model, DoorDash guaranteed a minimum payment to delivery workers but used customer tips to offset this guaranteed amount [2][4] - For example, if a customer tipped $11 on an order with a guaranteed amount of $10, the Dasher would only receive $12 instead of the full tip [4] - This model has since been discontinued, and DoorDash is now required to ensure that tips are paid in full to Dashers without affecting the company's guaranteed pay contributions [8][7] Settlement Details - The settlement will distribute restitution to affected workers, and DoorDash will also cover up to $1 million in settlement administration costs [5][7] - DoorDash must disclose its pay policy details to both Dashers and customers moving forward to ensure transparency [7]