NYC sues food delivery app for ‘stealing’ money from workers
New York City’s administration under Mayor Zohran Mamdani has sued food delivery app Motoclick, accusing the company and its CEO of deceptive practices that have “stolen” workers’ pay.The Department of Consumer and Worker Protection alleges Motoclick charged drivers a $10 fee for canceled orders and deducted the full cost of refunded orders from employees’ paychecks, and estimates the company owes millions in stolen wages and damages.The city is seeking to shut down the app and hold executives accountable, DCWP Commissioner Samuel Levine said, as it prepares to enforce new delivery-worker laws that take effect jan. 26. Levine also sent compliance notices to other platforms, including Instacart and Grubhub, under mayoral executive orders targeting junk fees and deceptive practices. Mamdani framed the action as part of an affordability agenda to protect delivery workers from exploitation.Separately, the administration released a report accusing DoorDash and Uber Eats of costing workers more than $550 million in tips by placing tipping options after checkout; the report found average tips of $0.76 per delivery on those apps versus $2.17 when tipping is offered at checkout. The city also noted the current minimum pay for app-based delivery workers is $21.44 per hour before tips and accused Motoclick of flouting that standard.
New York City sues food delivery app for ‘stealing’ money from workers
The administration of New York Mayor Zohran Mamdani sued food delivery app Motoclick on Thursday for allegedly stealing millions of dollars from its workers’ paychecks.
The lawsuit, filed by New York City’s Department of Consumer and Worker Protection, alleges Motoclick is engaging in deceptive business practices by charging employees a $10 fee for canceled orders and deducting the entire cost of refunded orders from their pay. The department estimates Motoclick and its chief executive owe millions in stolen pay and damages.
Mamdani’s administration is seeking to shut down the app in the city.
“Motoclick and its CEO tricked New Yorkers into working for their platform with false promises and then stole their tips and earnings – sometimes even driving workers into debt,” DCWP Commissioner Samuel Levine said in a statement. “We are seeking to shutdown this company and other predatory apps should be on notice. If you scam your workers, we will hold you and your executives accountable.”
The litigation comes before the city’s new delivery worker laws take effect on Jan. 26. Levine sent notices on Thursday to delivery companies, including Instacart and Grubhub, to comply with the laws.
The commissioner is tasked with enforcing two of Mamdani’s executive orders that target junk fees and other deceptive practices. The actions are in line with his affordability platform that New Yorkers gravitated toward during the mayoral race last year.
Mamdani vowed that the department will be more aggressive in protecting consumers from big corporations.
“Deliveristas make millions of New Yorkers’ day-to-day lives easier only for their own to be difficult. Today, however, marks the end of a chapter of thankless exploitation,” the mayor said. “Our Department of Consumer and Worker Protection is already cracking down on everything from baseless violations of the law to deceptive tricks that hurt our delivery workers — and showing what a government that puts working people first can accomplish every day.”
Mamdani’s administration separately took aim at DoorDash and Uber Eats in a report released Tuesday, alleging the food delivery apps cost their workers more than $550 million in tips by requiring customers to pay gratuities after the order checkout process.
The average tip for DoorDash and Uber Eats is $0.76 per delivery, whereas the average tip for rival apps that offer a tipping option at checkout is $2.17 per delivery.
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DoorDash and Uber Eats changed their tipping policies after New York City began hiking the minimum pay rate in December 2023 under then-Mayor Eric Adams. The current minimum pay for app-based delivery workers is $21.44 per hour before tips, nearly $3.50 higher than the amount at the policy’s initial rollout just over two years ago.
Mamdani’s office accused Motoclick of “blatantly” ignoring the minimum pay rate.
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