DoorDash will pay $5.3 million to San Francisco to settle allegations over benefits violations

Food delivery platform DoorDash has agreed to pay $5.3 million to the city of San Francisco to settle allegations it failed to provide healthcare and paid sick leave to some 4,500 delivery drivers, as the city requires. The company did not admit wrongdoing as part of the settlement, most of which will be used to reimburse drivers who made deliveries in the city between 2016 and 2020, before a new state law covering gig workers took effect.

California’s gig workers law, which voters approved in November 2020 as ballot measure Proposition 22, allows companies like Uber, Lyft, and DoorDash to treat workers as independent contractors, not employees. A judge ruled in August that the law was unconstitutional, but it remains in effect pending an appeal by the companies.

“We believe (DoorDash couriers) were misclassified and should have been employees for years,” San Francisco City Attorney David Chiu told the San Francisco Chronicle, which was first to report the news Monday. “That is not part of the settlement but it is the perspective of the city.” As part of the settlement announced Monday, most drivers will get between $500 and $1,000, and the Chronicle reported that both sides agreed to the settlement to avoid a prolonged court battle.

“We are proud of the flexible earning opportunities and meaningful benefits and protections Proposition 22 affords Dashers across California,” DoorDash spokeswoman Briana Megid said in a statement emailed to The Verge. “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.”