New York City Mayor Zohran Mamdani criticized DoorDash CEO Tony Xu for promoting a ‘greedy algorithm’ in business practices. This came as Mamdani announced a landmark $131.5 million settlement with DoorDash. The settlement addressed allegations that the company withheld tips from delivery drivers and systematically underpaid them.
During a news conference, Mamdani referred to comments Xu made on a podcast, highlighting how a CEO should opt for decisions with immediate benefit, without considering long-term consequences. He stated that this approach has affected many delivery workers who call New York City home.
The settlement discovered by the city’s Department of Consumer and Worker Protection (DCWP) includes $115 million directly for affected drivers, with some potentially receiving up to $5,000 each. Additional funds will cover fines and develop software to allow drivers to record their app usage and share payment data with the city.
Mamdani emphasized the groundbreaking nature of this settlement, as delivery workers can now crowdsource data to scrutinize algorithms influencing their pay and schedules. Under the agreement, DoorDash must submit delivery worker payment data to the city for three years.
DoorDash acknowledged the payment errors, though claimed they were unintentional. The company expressed regret for its operational mistakes and pledged to ensure timely, full payments to drivers.
Mamdani argued the company’s actions were deliberate, citing inadequate accounting for work hours, including canceled trips or cross-city deliveries. He continues his efforts to safeguard workers’ rights, revealing prior settlements with other delivery companies for wage violations.