Somewhere down the pavement lies something dark, fishy, and mysterious. No other than the newly-elected mayor of New York City, Zohran Mamdani, slammed the CEO of DoorDash for “greedy practices,” and cited its government slapping the company with a $131 million settlement.
So, that’s double-whammy for DoorDash. Here’s the scoop.
‘Greedy algorithm’
For the second-time around in recent memory, Mamdani, the mayor of New York City, blasted Tony Xu, the chief executive officer of DoorDash, for inciting the use of a “greedy algorithm.”
“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 stated during a Tuesday news conference, recalling remarks Xu made on a podcast released last 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. Thousands of them deliver for DoorDash, and thousands of them have felt the human cost of the greedy algorithm.”
So, let’s break that down.
$131 million settlement
In a previous report on Ridesharingforum.com, Mamdani has also previously slammed DoorDash, together with other food delivery apps, taking it to Bluesky, a social networking platform.
He wrote on Bluesky that time, “Uber Eats and DoorDash hid tip buttons and set default tips below 10 percent. As a result, tips for delivery workers fell 79 percent. In January, we made these corporations change their apps – and in the past six months, we’ve put $104 million back in delivery workers’ pockets. This is only the beginning.”
Aside from lambasting DoorDash’s alleged greedy practices, Mamdani, during that news conference, also cited the approximately $131 million settlement that awaits DoorDash, together with the city of New York, after its Department of Consumer and Worker Protection discovered that the company was systematically underpaying delivery drivers. Yes, that which DoorDash admitted, interestingly enough.
According to the Muslim mayor, this settlement is “the largest settlement for food delivery workers ever secured in American municipal history."
Not that the government is grinning because of this huge money! From this, $115 million will go directly back to delivery workers, with some set to receive up to $5,000. The rest will be allocated to fines and the development of software that will allow delivery workers to record on the DoorDash app and share data about their payment with the city.
“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 further noted. Got clarifications about this news? Open your account on RSF to share your thoughts in the comments section! It’s all heating up here on RSF, the global newsroom and forum for ridesharing, coupons, food deliveries, business, lifestyle, and so much more!