- New York City settled $131.5M with DoorDash for underpaying workers.
- Mayor Mamdani criticized CEO’s
- $115 million goes to 260,000 workers, payments start October.
- New software will monitor DoorDash payments for three years.
New York City Mayor Zohran Mamdani criticised DoorDash CEO Tony Xu on Tuesday as the city announced a $131.5 million settlement with the food delivery company over alleged violations involving delivery worker payments. Mamdani directly referenced remarks Xu made on a podcast in July while announcing the agreement, using the CEO’s description of a “greedy algorithm” to frame his criticism of DoorDash’s approach to business.
The settlement follows an investigation by the city’s Department of Consumer and Worker Protection (DCWP), which found that DoorDash had underpaid delivery workers in violation of New York City’s minimum pay requirements.
Mamdani Targets DoorDash CEO
At a news conference, Mamdani recalled Xu’s comments about how business leaders should approach decision-making. “Two months ago, Tony Xu, the CEO of DoorDash, gave business owners a piece of advice. A CEO, he said, has to take the greedy algorithm and keep going all the way to see if there is more,” Mamdani said, as per reports.
Mamdani then explained the computer science concept behind the phrase, describing a greedy algorithm as one that chooses the most optimised short-term option at every stage without considering longer-term consequences. “New York City and the tens of thousands of delivery workers who call our city home have reckoned with greed as a business model for far too long,” Mamdani said.
He added that DoorDash employs thousands of delivery workers in New York City and argued that the company’s business practices had affected workers directly.
$131.5 Million Settlement
The agreement totals $131.5 million, with Mamdani describing it as the largest settlement involving food delivery workers ever obtained by an American municipality. The settlement stems from a DCWP investigation into DoorDash’s payments to delivery workers. Officials examined 152 million individual payments as part of the probe and identified violations of New York City’s minimum pay standards.
The investigation covered payments made between April 2022 and June 2026.
Workers To Receive Payments
Around $115 million of the settlement will be distributed directly to delivery workers who were allegedly underpaid during the period examined by the city.
More than 260,000 workers are expected to receive payments, with distributions scheduled to begin in late October. Individual payments could reach as much as $5,000, depending on the worker’s circumstances and the amount determined to be owed.
The remaining portion of the settlement will go towards penalties and other measures connected to enforcement and monitoring.
New DoorDash Monitoring
As part of the agreement, new software will be developed to allow delivery workers to record activity on the DoorDash app and provide payment information to the city.
DoorDash will also be required to provide compliance data to New York City for the next three years.
The additional monitoring is intended to give city authorities access to information about worker payments and help track compliance with the city’s pay requirements.
The settlement marks a major enforcement action involving a food delivery platform in New York City and places renewed focus on how app-based companies calculate and distribute payments to delivery workers.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: abplive.com
