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 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.
DOORDASH DEACTIVATES DRIVER ACCUSED OF STEALING DHS FOOD ORDERS AFTER VIRAL POST 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." $115 million of the settlement will go directly back to delivery workers, with some in line to receive up to $5,000. The rest will go towards 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.
DOORDASH GETS FAA APPROVAL FOR ITS OWN DELIVERY DRONES "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. AMERICA’S TIPPING CULTURE HAS GONE FROM REWARDING SERVICE TO FEE INSANITY AMERICANS SAY TIPPING PRACTICES 'HAVE BECOME RIDICULOUS' AS DIGITAL PROMPTS PUSH HIGHER GRATUITIES DoorDash admitted to underpaying workers, though claimed it was unintentional.
"Simply put, we screwed up," DoorDash said in a statement obtained by the . "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 that the company's alleged misconduct was no accident.
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