DoorDash also did not make it clear to customers that their tips were being used to offset worker wages, said James, a Democrat.
“This is just fundamentally unfair,” she said at a news conference in Manhattan. ”Customers had no reason to believe that these tips were being used by DoorDash to reduce its costs."
The company will pay $16.75 million in restitution that will be distributed to DoorDash workers who made deliveries between May 2017 and September 2019 in New York. Eligible workers will be contacted by a settlement administrator.
In a statement, DoorDash said, "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 said the old pay model is no longer in use.