NYC Claims DoorDash and Uber Owe $550 Million in Unpaid Tips
DoorDash Inc. and Uber Technologies Inc. have deprived New York delivery workers of more than $550 million in tips after changing the interfaces on their apps, according to findings released in a report from a city agency.
Mayor Zohran Mamdani’s administration revealed that the companies relocated tipping prompts to less visible areas in their apps following the implementation of new pay standards for delivery workers in December 2023. During this period, the apps increased customers’ service fees to subsidize the new pay rate and shifted the in-app tipping function to after checkout, making the upfront delivery costs appear lower.
“Under Mayor Mamdani, the biggest corporations in the world will no longer be able to rake in record profits on the backs of workers and consumers,” stated Department of Consumer and Worker Protection Commissioner Samuel A.A. Levine. “If these companies do not adhere to the new tipping laws going into effect later this month, they will face significant consequences.”
A spokesperson for DoorDash dismissed the DCWP report as “flat out wrong,” asserting that their delivery workers always receive 100% of tips placed through the app. John Horton, the company’s head of North America public policy, emphasized, “Moving tipping to after checkout isn’t novel or nefarious — it’s how tipping works in many areas of life. Forcing people to tip may as well be a tax. It should be up to consumers, not politicians, whether they want to tip more in New York after already paying for a billion-dollar raise for workers.”
An Uber representative did not immediately respond to a request for comment.
According to the report released on Tuesday, average tips on both platforms plummeted to $0.93 per delivery from $3.66 within just a week of the adjustments. Over 18 months, this shift resulted in a staggering $554 million loss in tip income, translating to roughly $5,800 per worker annually.
Mamdani, who campaigned for improved working conditions and treatment of delivery workers, signed an executive order shortly after taking office. This order aims to crack down on junk fees and misleading subscriptions, specifically naming Uber and DoorDash as offenders.
This initiative builds on labor changes enacted during former mayor Eric Adams’ administration, which aimed to support delivery workers. New amendments to the city’s delivery worker laws now require apps to provide more prominent tipping options, including allowing customers to tip during checkout and offering a selectable 10% tip suggestion.
In response, DoorDash and Uber have jointly sued the city to block these requirements, claiming they violate their free speech rights under the First Amendment. The companies argue that the laws compel them to “advocate for and implicitly endorse the city’s preferred message.”
“With new laws protecting workers’ tips taking effect in 2026, DCWP is committed to full transparency about how predatory delivery app companies have profited at the expense of workers and consumers,” the agency stated in an emailed message. “We look forward to enforcing these protections to ensure workers receive the pay they deserve and that consumers regain the ability to tip freely, without barriers.”
–With assistance from Natalie Lung.
Top Photo: A delivery worker carries a DoorDash bag during a delivery in New York. Bloomberg photo.
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DoorDash Inc. and Uber Technologies Inc. have deprived New York delivery workers of more than $550 million in tips after changing the interfaces on their apps, according to findings released in a report from a city agency.
Mayor Zohran Mamdani’s administration revealed that the companies relocated tipping prompts to less visible areas in their apps following the implementation of new pay standards for delivery workers in December 2023. During this period, the apps increased customers’ service fees to subsidize the new pay rate and shifted the in-app tipping function to after checkout, making the upfront delivery costs appear lower.
“Under Mayor Mamdani, the biggest corporations in the world will no longer be able to rake in record profits on the backs of workers and consumers,” stated Department of Consumer and Worker Protection Commissioner Samuel A.A. Levine. “If these companies do not adhere to the new tipping laws going into effect later this month, they will face significant consequences.”
A spokesperson for DoorDash dismissed the DCWP report as “flat out wrong,” asserting that their delivery workers always receive 100% of tips placed through the app. John Horton, the company’s head of North America public policy, emphasized, “Moving tipping to after checkout isn’t novel or nefarious — it’s how tipping works in many areas of life. Forcing people to tip may as well be a tax. It should be up to consumers, not politicians, whether they want to tip more in New York after already paying for a billion-dollar raise for workers.”
An Uber representative did not immediately respond to a request for comment.
According to the report released on Tuesday, average tips on both platforms plummeted to $0.93 per delivery from $3.66 within just a week of the adjustments. Over 18 months, this shift resulted in a staggering $554 million loss in tip income, translating to roughly $5,800 per worker annually.
Mamdani, who campaigned for improved working conditions and treatment of delivery workers, signed an executive order shortly after taking office. This order aims to crack down on junk fees and misleading subscriptions, specifically naming Uber and DoorDash as offenders.
This initiative builds on labor changes enacted during former mayor Eric Adams’ administration, which aimed to support delivery workers. New amendments to the city’s delivery worker laws now require apps to provide more prominent tipping options, including allowing customers to tip during checkout and offering a selectable 10% tip suggestion.
In response, DoorDash and Uber have jointly sued the city to block these requirements, claiming they violate their free speech rights under the First Amendment. The companies argue that the laws compel them to “advocate for and implicitly endorse the city’s preferred message.”
“With new laws protecting workers’ tips taking effect in 2026, DCWP is committed to full transparency about how predatory delivery app companies have profited at the expense of workers and consumers,” the agency stated in an emailed message. “We look forward to enforcing these protections to ensure workers receive the pay they deserve and that consumers regain the ability to tip freely, without barriers.”
–With assistance from Natalie Lung.
Top Photo: A delivery worker carries a DoorDash bag during a delivery in New York. Bloomberg photo.
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