DoorDash Settlement Would Pay a Paltry $180 to Workers Instead of Making Them Employees

DoorDash Settlement Would Pay a Paltry $180 to Workers Instead of Making Them Employees
Photo: Michael M. Santiago, Getty Images

DoorDash is clearing a suite of U.S. class-action lawsuits from Massachusetts and California off its plate, just as it marches ahead with extended battles in those states against employee classification. The company’s proposed settlement for claimants in 11 cases results in a predictably lousy payout for workers who’ve been fighting for years for employee classification and a minimum wage; of the $US100 ($137) million settlement fund, $US28 ($38) million has been allocated for lawyers, and an estimated $US130 ($178) for each Dasher who makes a claim.

“$US130 ($178) dollars is a complete joke,” a spokesperson for the labour rights campaign Gig Workers Rising told Gizmodo. “Doordash CEO Tony Xu took home $US413m last year. They can afford to pay workers way, way more.” Last year, Xu received one of the largest CEO compensation packages of all time. Meanwhile, DoorDash has earmarked approximately $US61 ($83) million of its settlement for Dashers. DoorDash will allocate $US10,000 ($13,680) each to named plaintiffs who filed the suits.

None of the lawyers contacted in those cases have responded to Gizmodo’s request to confirm that the settlement on the site is authentic, and it doesn’t yet appear on the case docket. On Wednesday, DoorDash confirmed to Gizmodo that the linked site is a description of the settlement agreement.

That sum falls scandalously short of the requests Dashers had initially made. The settlement lumps together two ongoing suits, and eight pending ones, under a 2017 case Marko v. DoorDash, Inc., in which three Dashers asked that the court force the company to give Dashers employee status to which they are entitled under California’s labour code. They claimed that they were owed work expenses, overtime pay, and minimum wage, among other forms of compensation.

DoorDash promises that as a result of the settlement, it’ll start giving drivers in California and Massachusetts the entirety of their tips, without DoorDash deducting them from their pay. But the company already supposedly resolved that issue in 2019 and reached a separate $US2.5 ($3) million settlement with aggrieved drivers last year.

DoorDash’s decision to settle this bundle of suits is interestingly timed, in the scheme of its joint campaign with Uber and Lyft to permanently shield itself from classifying workers as employees. Doing so would force it to pay minimum wage, unemployment insurance, and potentially reckon with unions. Last year, California passed a law that would do just that, but rather than follow the law, DoorDash, Uber, and Lyft led the charge to overturn the hard-fought policy with their own ballot measure Prop 22.

The companies wrote in provisions making it incredibly difficult for lawmakers to repeal, and they spent over $US200 ($274) million to deceive the public into believing that it was a workers’ rights measure. A Los Angeles superior court judge found that the ballot measure’s stated purpose was an outright lie, writing that its actual M.O. — squashing collective bargaining, minimum wage requirements, and safety provisions — served “only to protect the economic interests of the network companies in having a divided, ununionized workforce.” The companies have said they plan to appeal the ruling, and DoorDash said in a defiant statement that “Prop 22 remains in full effect.”

Now in the settlement agreement, DoorDash writes that both sides reached an agreement after “considering the risks and uncertainties of continued litigation.” DoorDash claims that the plaintiffs risk losing their cases if the courts enforce the company’s arbitration agreement, dictating that independent contractors can’t sue. DoorDash doesn’t specify its own risks, but it seems that another judge ruling in favour of allowing those workers to sue, and employee classification, would be on the list.

DoorDash notes in the settlement agreement that it still considers Dashers independent contractors and that the court has not ruled in favour of either side. The judge is set to issue a final decision on November 30th.

Due to the locations of the suits, you’ll only qualify for the $US130 ($178)-ish payout if you’ve Dashed in Massachusetts between September 26, 2014, through March 31, 2021, or California from August 30, 2016, through December 31, 2020. If that’s you, you can file a claim here.