San Francisco reaches $5 million labor settlement with DoorDash

San Francisco just received its largest labor-related settlement in history from food delivery app DoorDash.

San Francisco officials announced Monday that the city had secured a $5.32 million settlement from DoorDash after an investigation into the food delivery app’s labor practices. The payout is now expected to be distributed to 4,500 workers in the San Francisco area.

“We are living through an era of deep inequality, and nothing could be more important than ensuring workers are paid fairly, and their benefits are safeguarded,” said City Attorney David Chiu in a press statement. “The City conducted a thorough, diligent investigation that resulted in this unprecedented settlement for San Francisco workers.”

In 2019, San Francisco’s Office of Labor Standards Enforcement investigated DoorDash over alleged violations of the city’s healthcare policies and paid sick leave policy. The OLSE affirmed four violations.

OSLE also received reports alleging that the company was incorrectly classifying workers as contractors and including customer tips in the base pay, diminishing the per-hour rate that DoorDash had to pay out of pocket. DoorDash’s settlement is the largest settlement that San Francisco’s labor office has ever reached.

Most of the workers named in the lawsuit will receive payouts between $500 and $1,500. Some payouts will be as high as $17,000, according to the San Francisco Chronicle.

“We are proud of the flexible earning opportunities and meaningful benefits and protections Proposition 22 affords Dashers across California,” A DoorDash spokesperson told the Washington Examiner. “While we deny any wrongdoing, we feel that this settlement represents a fair compromise that will allow us to focus on continuing to provide the best experience for Dashers.”

Proposition 22 was a piece of legislation passed in 2020 that exempts “gig economy” workers from state mandatory employee rules.

DoorDash claims that San Francisco-based delivery drivers earned more than $36 an hour on average (including 100% of their tips), higher than the app’s $25 national hourly rate.

This is not the first settlement that DoorDash has reached in the past year. In September, the delivery company agreed to a $100 million settlement benefiting drivers who delivered through the app in California and Massachusetts and were improperly classified as contractors.

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