A popular food delivery service accused of withholding tips meant for its drivers to boost its own bottom line will be required to cough up $2.5 million to resolve allegations that it misled D.C.-area consumers.
In a lawsuit filed in November 2019, D.C. Attorney General Karl Racine’s office alleged that from 2017 to 2019, DoorDash misled consumers into believing their tips would increase worker pay when, in fact, tips were used to subsidize DoorDash’s payments to its workers, according to a recent OAG press statement.
As part of the settlement, DoorDash, which has since revised its tips policy, will pay $1.5 million to delivery workers, $750,000 to D.C., and $250,000 to two District charities.
The company will also be required to maintain a payment model that ensures all tips go to workers without lowering their base pay, and it will be required to provide clear and easy-to-access information about its policies and payment model to workers and consumers, according to Racine’s office.
“Today’s settlement rights a wrong that deceived D.C. consumers and deprived workers of monies that they should have been paid,” Racine said in the press statement. “Gig economy companies provide important and necessary services, especially during the pandemic. However, the law applies to these companies, just as it does to their brick-and-mortar counterparts. All businesses in the District must provide consumers with truthful information and cannot deprive workers of monies they have earned. We are pleased that DoorDash has changed its policies, and with this settlement has taken responsibility for its actions.”