DoorDash to pay $131 million to New York delivery workers after city finds it ran a 'greedy algorithm'

From the Newshound archive · first published 22 September 2026 · last updated 23 September 2026.

New York City Mayor Zohran Mamdani blasted DoorDash CEO Tony Xu for operating a 'greedy algorithm' that systematically stripped tips from delivery drivers, announcing a landmark $131.5 million settlement on Tuesday. More than 260,000 drivers who were underpaid between April 2022 and June 2026 will receive direct payments from late October. DoorDash admitted fault, saying in a statement: 'Simply put, we screwed up.' The company must also submit compliance data to the city for three years.

Mamdani quoted Xu's own podcast remarks about the 'greedy algorithm,' telling workers: 'New York City has reckoned with greed as a business model for far too long.'

The city's Department of Consumer and Worker Protection found DoorDash had cut average driver tips from $3.66 per order down to just 76 cents after new tipping rules were introduced.

DoorDash said roughly $6.6 million in tips never reached drivers at all, with a further $5.7 million paid out days or weeks late.