Bay Area DoorDash to Pay $ 2.5 Million After Alleged Tip Theft



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Bay Area restaurant delivery company DoorDash has agreed to pay $ 2.5 million to settle a government lawsuit alleging stealing tips from drivers and deceiving customers into believing their tip was going to drivers.

Washington, DC Attorney General Karl Racine filed a civil suit last year and, in a press release, accused the San Francisco company of “cutting labor costs by dragging tips left to workers ”.

Racine said that “DoorDash has tricked consumers into believing that any tip will go directly to food delivery people, while effectively treating that money as additional profit for the business.”

The lawsuit in the District of Columbia Superior Court alleged that DoorDash would reduce drivers’ wages for each job by the amount of any tip. For example, if a customer left no tip on a job that had to pay the driver $ 10 – called “Dasher” by the company – DoorDash would pay the driver $ 10, but if a customer tipped $ 9, DoorDash would pay 1 $, the costume claimed. “The only thing the consumer’s tip has changed is DoorDash’s share of the worker’s pay,” the lawsuit alleged.

The San Francisco-based company, in the settlement order issued Tuesday, denied the allegations. In an emailed statement on Wednesday, the company said it was happy the issue was resolved. “Our goal is to continue to support Dashers, restaurants and customers in Washington and across the country,” DoorDash said. The company added that the allegations were about its old pay model, which it scrapped in September 2019, replacing it with a new model that gives drivers 100% tips.

DoorDash spent $ 48 million in the successful $ 200 million campaign by “gig economy” companies including Uber, Lyft, Instacart and Postmates, to pass Proposition 22 this year and overturn state law demanding that their drivers be treated as employees entitled to minimum wage and benefits.

As part of the Washington, DC settlement, DoorDash is to pay DC drivers $ 1.5 million, donate $ 250,000 to two DC charities, and pay $ 750,000 to the DC government.

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