Tipping collapsed on delivery apps after December 2023 algorithm changes
Delivery app tipping dropped sharply after December 2023 platform algorithm changes reshaped customer tip displays.
Event / Economy
NYC Delivery Platform Worker Settlement
DoorDash reached a $131.5 million settlement with New York City over underpayment and delayed payment allegations affecting approximately 264,000 delivery workers. Nearly $115 million will be distributed to affected workers, with $83 million resolving disputes over on-call time wage calculations and $12.3 million compensating workers for missed or delayed payments. DoorDash will pay an additional $16.7 million in fines to the city.
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2026-09-23 to 2026-11-02 · UTC publication dates
Coverage begins 23 Sept, 03:27 UTC
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What happened
Tipping on DoorDash and Uber Eats platforms declined sharply after December 2023 changes
A New York City Department of Consumer and Worker Protection report found that tipping on the platforms dropped significantly after changes implemented in December 2023. Average tips fell from $3.66 per order to 93 cents in the first week after changes took effect, declining further to 76 cents per delivery. The city alleged that DoorDash and Uber Eats cost delivery workers more than $550 million through these tipping system changes.
DoorDash agrees to pay $131.5 million to settle New York City delivery worker underpayment claims
DoorDash reached a settlement with New York City's Department of Consumer and Worker Protection to pay $131.5 million over allegations the company underpaid or delayed payments to delivery workers. The settlement was announced on September 22, 2026. Nearly $115 million will go directly to approximately 264,000 affected delivery workers, with the remainder going to city fines and penalties. The company acknowledged errors in its payment systems, stating the mistakes resulted from technical bugs and complicated situations including deliveries crossing city boundaries, multiple pickup/drop-off locations, partially completed orders, and incomplete banking information from workers.
New York City Department of Consumer and Worker Protection enforces delivery worker pay laws
The DoorDash settlement represents part of Mayor Zohran Mamdani's intensified enforcement of New York City's delivery worker laws. In January 2026, the city announced a separate settlement requiring Uber Eats, Fantuan, and HungryPanda to pay more than $5 million in restitution, penalties, and damages over alleged violations affecting nearly 50,000 delivery workers. Uber also agreed to reinstate workers whom the city said had been improperly deactivated, potentially affecting as many as 10,000 people.
DoorDash disputes with New York City over on-call time wage calculations resolved
The settlement includes approximately $83 million to resolve a dispute over how DoorDash calculated pay for on-call time—periods when delivery workers are logged into the app and available but not actively completing deliveries. New York City requires delivery apps to account for both active delivery time and on-call time when meeting the minimum pay requirement of $22.13 per hour. DoorDash had compensated workers for on-call time through weekly bonus payments using a different calculation method than city regulators required. Going forward, DoorDash agreed to adopt the city's calculation methodology.
DoorDash to compensate workers for missed and delayed payments totaling $12.3 million
As part of the settlement, DoorDash will pay $12.3 million to approximately 209,000 workers who experienced missing or delayed payments. About $6.6 million in payments never reached workers, while $5.7 million arrived days or weeks late. The average missing payment was $7.70, with 65 percent of affected workers owed $1 or less. All affected workers will receive at least $10, with the median overall payment expected to be approximately $48.
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2 alternative perspectives
DoorDash to Pay $131.5 Million in NYC Worker Compensation Settlement
DoorDash settles NYC delivery worker underpayment claims for $131.5 million including back wages.