DoorDash categorically denied the allegations but changed its policy in September 2019 to ensure its employees receive the tips consumers believed paid.
DoorDash, a grocery delivery application, is paying $ 2.5 million to settle claims that it stole worker tips in Washington, DC
The lawsuit against DoorDash was filed in November 2019, according to the Washington Post. The complaint was filed by DC Attorney General Karl Racine alleging that DoorDash committed misleading in-app disruption between 2017 and 2019.
This disruption, according to the Post, indicated that customers who wanted to add a “tip” would add their delivery driver’s gross income.
In reality, however, the company put the optional “tips” from DoorDash in their pockets. Tips were used at best to complement the flat rate of $ 7 per delivery that DoorDash pays its drivers.
“Any reasonable consumer would have expected that the” tip “that he added to the delivery fee via the DoorDash checkout screen flow would be made available to the Dasher in addition to the payment promised by DoorDash for the delivery,” says the lawsuit . “However, this was not the case in the relevant period.
“Instead,” the suit continues, “DoorDash has used consumer tips to subsidize the payment of the guaranteed amount.” [per delivery] Dashers promised. “
Karl Racine, Washington, DC’s first elected attorney general. Image via Wikimedia Commons via DC Government. (CCA-BY-1.0).
As LegalReader previously reported, DoorDash has been criticized for doing everything in its power to keep its tip and payment policies as obscure as possible – virtually guaranteeing that most consumers won’t know where their tips are really going.
The Racine lawsuit alleges that DoorDash’s “disclosures” about its compensation model were “ambiguous, confusing and misleading” in that they encouraged tipping but “did not disclose in the vast majority of circumstances.” [that tips would] Make no difference at all to a Dasher’s salary and would only subsidize DoorDash’s share of the Dasher’s salary. “
While DoorDash has long denied any wrongdoing, the company changed its policy in September 2019. As such, the settlement only covers claims from the time the Misleading Tipping Policy was in place.
Of the total $ 2.5 million award, $ 1.5 million goes to confused delivery drivers and $ 750,000 to Washington, DC. The remaining quarter of a million will be split between two charities in the DC area.
“Today’s settlement rights are a flaw that has deceived DC customers and stolen the workers from the money they should have paid,” Racine said in a statement. “Gig economy companies offer important and necessary services, especially during the pandemic. However, the law applies to these companies as well as to their stationary colleagues. “
The Washington Post notes that the settlement consent form allows DoorDash to make payments and agree to DC’s terms without actually admitting wrongdoing.
Campbell Matthews, a DoorDash spokesman, said the company was “pleased to have this problem behind us”.
“Our focus,” said Matthews, “is to continue serving Dashers, restaurants and customers in DC and across the country.”
DoorDash settles $ 2.5 million DC lawsuit after accused of pocketing worker tips
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DoorDash is paying $ 2.5 million to settle DC lawsuit over driver tips