Uber Eats and DoorDash introduced app design changes after New York City implemented a minimum pay standard for food delivery workers that resulted in couriers losing more than $550 million in tips, according to a report released Tuesday by the New York City Department of Consumer and Worker Protection.
The department said the companies altered their app interfaces in New York City only, requiring customers to tip after checkout through a separate and less visible process, shortly after the city began enforcing an $18 per hour minimum pay rate for delivery workers.
“Our report uncovers a widespread scheme by Uber and DoorDash that reduced worker pay by more than $550 million, amounting to an estimated loss of approximately $5,800 per year for workers,” the department said in a statement Wednesday. “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.”
New York City’s minimum pay rule took effect in December 2023, following the passage of Local Law 115 in 2021. That law authorized the Department of Consumer and Worker Protection to study delivery worker compensation and establish industry-wide minimum pay standards.
According to the report, tipping fell sharply after the rule went into effect. Average tips dropped from roughly $3 per delivery to about 76 cents on Uber Eats and DoorDash orders, the department said. By contrast, apps that continued to offer tipping at checkout generated an average tip of $2.17 per delivery.
Samuel A.A. Levine, commissioner of the Department of Consumer and Worker Protection, said the city will not allow companies to undermine worker protections.
“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,” Levine said in a statement. “If these companies do not follow new tipping laws going into effect later this month, they will face significant consequences.”
DoorDash disputed the city’s findings. John Horton, the company’s head of North America public policy, said the report was inaccurate.
“The department’s claims are flat out wrong,” Horton said in a statement Wednesday. “No money has been stolen from Dashers, and consumers have not been misled.”
Horton added that post-checkout tipping is common in other service industries and said the city itself recommended the approach in a 2022 study.
“Now they are attacking us for following that suggestion,” he said.
Uber did not immediately respond to a request for comment Wednesday.
Shannon Liss-Riordan of Lichten & Liss-Riordan PC, an attorney who has represented delivery drivers in prior wage-and-hour litigation against Uber, said the report reflects longstanding concerns.
“These issues have been ongoing,” Liss-Riordan said. “We are very pleased to see further efforts to ensure drivers receive the pay they are owed and the tips customers intend them to receive.”
Beginning Jan. 26, food delivery platforms operating in New York City must comply with new rules requiring an upfront tipping option at checkout, including a default 10 percent option and the ability for customers to customize tip amounts.
The department said it will continue monitoring compliance through data analysis, public reporting, and enforcement actions.
