Food delivery service DoorDash has settled a dispute with New York City over claims it underpaid its tipped workers.

"Simply put, we screwed up. Our mistakes meant some Dashers were underpaid or paid late," the company said in a statement released Tuesday morning. The news sent the stock up more than 3% shortly after the opening bell. It was trading up 1% at $195.38 by late morning.

Investors are likely breathing a sigh of relief that the company settled the matter for the relatively modest total amount of $131.5 million, with all but $16.7 million going directly to the workers who were underpaid or paid late.

More than 200,000 Dashers, as the firm's delivery workers are called, will receive the payments. The median amount comes to $48 a worker, with each worker receiving a minimum of $10.

New York City's Department of Consumer and Worker Protection, which initiated the audit that led to the settlement, did not respond to Barron's request for comment.

DoorDash's stock has struggled in 2026, and is currently down more than 13%. Increased spending on everything to cover higher gas prices for drivers to some $1.3 billion in stock-based compensation for its corporate staff have weighed on its shares.