DoorDash to pay New York delivery workers nearly $17M for using tips to subsidize wages
Published On Feb 25, 2025, 4:02 AM
DoorDash has agreed to pay nearly $17 million to delivery workers in New York after it was revealed that the company used customer tips to subsidize the wages of its delivery workers rather than providing them in addition to the base pay. This settlement is a result of a legal action taken by New York Attorney General Letitia James, who criticized the company's compensation practices as fundamentally unfair. Under the previous system, workers only received their tips if they surpassed a guaranteed base pay, leaving many with less than they should have earned. The company has since committed to changing its wage practices to ensure tips are passed on in full and has promised more transparency in its payment policies.
Stock Forecasts
DASH
Negative
The financial burden of this settlement may impact DoorDash's cash reserves in the short term. However, the long-term implications could be mixed. While resolution of this legal issue may improve DoorDash's public image and attract more customers and drivers looking for fair practices, it could also strain operational budgets due to increased wage transparency requirements.
Related News
Evercore ISI head of internet research Mark Mahaney argues that DoorDash’ stock is a long-term opportunity during an appearance on ‘Varney & Co.’