On Monday, the New York attorney general’s office announced a nearly $17 million DoorDash settlement after the popular delivery platform “[misled] both consumers and delivery workers” by pocketing its workers' tips to subsidize their pay.
In a press release obtained by TODAY, New York Attorney General Letitia James said an Office of the Attorney General (OAG) investigation found that DoorDash “used customer tips to offset the base pay it had already guaranteed to workers, instead of giving workers the full tips they rightfully earned” between May 2017 and September 2019.
James added that DoorDash misled customers into thinking their tips would be given to delivery drivers, better known as Dashers. In actuality, DoorDash pocketed those tips, adding the funds to the driver's base pay instead of giving them the full tips they earned.
“This is just fundamentally unfair,” James said during a news conference in Manhattan, per USA Today. “Customers had no reason to believe that these tips were being used by DoorDash to reduce its costs . . . They knew it wasn't right and they did it anyway.”
A DoorDash spokesperson said in a statement to TODAY.com, “We remain committed to making sure that Dasher earnings are always fair and transparent, and the allegations settled were related to an old pay model that was retired in 2019. To be clear: Dashers always keep 100% of tips from orders on the DoorDash app.”
“While we believe that our practices properly represented how Dashers were paid during this period, we are pleased to have resolved this years-old matter and look forward to continuing to offer a flexible way for millions of people to reach their financial goals,” the spokesperson added.
Under the settlement, DoorDash “will pay $16.75 million in restitution for Dashers and up to $1 million in settlement administrator costs to help issue the payments,” TODAY reported.
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