NEW YORK, January 30, 2026 – Uber eats will pay $3.5 million to settle allegations of underpaying its delivery workers in New York City, a penalty that highlights growing scrutiny of gig economy labor practices. The agreement requires Uber to provide $3.15 million in restitution to approximately 48,000 drivers and deliver $350,000 in civil penalties and fees.
Gig Workers Gain Ground: Uber Eats Faces $3.5 Million Penalty
New York City orders Uber eats to compensate drivers for lost earnings and address deceptive practices impacting tips.
- Uber Eats will pay $3.15 million in restitution to 48,000 New York City delivery workers.
- The city alleges Uber Eats failed to pay minimum rates for canceled trips between December 2023 and September 2024.
- Uber will reinstate as many as 10,000 workers who were allegedly wrongfully deactivated.
- Fantuan and HungryPanda are also required to make payments, totaling $5.2 million alongside Uber Eats.
New York city Mayor Zohran Mamdani and the Department of Consumer and Worker Protection (DCWP) announced the order friday.The DCWP investigation found that Uber Eats did not pay workers the legally mandated minimum rate for time spent on trips that were afterward canceled, between December 2023 and September 2024.
What are food delivery companies doing to worker tips? A DCWP report revealed that Uber and other food delivery platforms may have engineered their app interfaces to reduce worker tip earnings by a staggering $550 million. The report suggests intentional design choices impacted how much drivers ultimately received in tips.
Alongside Uber Eats,food delivery services Fantuan and HungryPanda have also been ordered to make payments,bringing the total restitution amount to $5.2 million. The city is holding these companies accountable for similar violations of worker pay standards.
Beyond financial restitution, Uber has agreed to reinstate workers who were allegedly deactivated from the platform without justification. The mayor’s office estimates this could impact up to 10,000 individuals, offering them a renewed opportunity to earn income through the app.
The action follows a broader effort by the DCWP to enforce new delivery worker protection laws that took effect in January. Commissioner Levine sent compliance warnings to more than 60 delivery companies earlier that month, emphasizing the importance of adhering to the updated regulations.
Explanation of Changes & Answers to Questions:
* Why: The settlement occurred because the DCWP investigation found Uber Eats failed to pay its delivery workers the legally mandated minimum rate for canceled trips between December 2023 and September 2024, and potentially manipulated app interfaces to reduce worker tips.
* Who: The key players are Uber Eats, the New York City Department of Consumer and Worker Protection (DCWP), new York City Mayor Zohran Mamdani, approximately 48,000 Uber Eats delivery workers, and also Fantuan and HungryPanda.
* What: Uber Eats, along with Fantuan and HungryPanda, will pay a total of $5.2 million in restitution and penalties to delivery workers in New York City for underpayment of wages and deceptive practices related to tips. Uber Eats will also reinstate up to 10
