New York City Mayor Zohran Mamdani blasted DoorDash CEO Tony Xu for encouraging the use of a “greedy algorithm” while announcing the city’s historic $131 million settlement with DoorDash over the company’s alleged withholding of delivery driver tips.
“Two months ago, Tony Xu, the CEO of DoorDash, gave business owners a piece of advice. A CEO, he said, has to take the greedy algorithm and keep going all the way to see if there is more,” Mamdani said during a Tuesday news conference, recalling remarks Xu made on a podcast released in July.
“In computer science, a greedy algorithm is one that makes the most optimized, best short-term outcome choice at every step and never weighs the consequences. New York City and the tens of thousands of delivery workers who call our city home have reckoned with greed as a business model for far too long,” Mamdani continued.
“Thousands of them deliver for DoorDash, and thousands of them have felt the human cost of the greedy algorithm,” he added.
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At the news conference, Mamdani announced a historic $131.5 million settlement between DoorDash and the city of New York after the city’s Department of Consumer and Worker Protection (DCWP) discovered that the company was systematically underpaying delivery drivers.
Mamdani said the $131.5 million marked the “largest settlement for food delivery workers ever secured in American municipal history.”
From the settlement, $115 million will go directly back to delivery workers, with some in line to receive up to $5,000. The rest will go toward fines and the development of software that will allow delivery workers to record the DoorDash app and share data about their payment with the city.
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“For the first time, workers will have the power to crowdsource data and investigate the black box algorithms that dictate their schedules and pay,” Mamdani announced.
Under the settlement, DoorDash will also be required to regularly submit delivery worker payment data to the city for three years.
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DoorDash admitted to underpaying workers, though claimed it was unintentional.
“Simply put, we screwed up,” DoorDash said in a statement obtained by the Associated Press.
“While these mistakes weren’t intentional, that doesn’t make them okay. We pride ourselves on operational excellence at DoorDash – and this was not excellent, nor was it acceptable. Dashers should be paid in full, on time, every time. We are sorry to the Dashers we let down,” the company said.
But while the company characterized the underpayments as a slip-up, Mamdani said the company’s alleged misconduct was no accident.
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“For years, DoorDash failed to count every hour worked by delivery workers. This was not a rounding error or an accidental mistake. In 2023, when the city began enforcing a minimum pay rate for delivery workers, DoorDash left time out of the count, time on canceled trips and trips that crossed city limits,” he said Tuesday.
Fox News Digital contacted DoorDash for further comment on Mamdani’s remarks.
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Mamdani’s announcement marks the latest in his ongoing crusade against food delivery conglomerates.
In January, he announced a $5 million settlement with a group of companies that included Uber Eats for failing to pay drivers minimum wage. In April, his administration secured a $875,000 settlement with HungryPanda for allegedly charging area businesses illegal junk fees.
Fox News Digital contacted the mayor’s office for further comment.
