The brouhaha over how DoorDash has doled out tips to its delivery staff is rearing its head again.
On Tuesday, District of Columbia Attorney General Karl Racine filed a lawsuit against DoorDash, claiming that the San Francisco-based meal delivery company led consumers to believe that their tips were going to delivery people when the company was instead pocketing the money for its own benefit. Racine said the suit follows an investigation his office launched in March into DoorDash tipping policies that were in place from July 2017 until September 2019.
“DoorDash misled consumers, who reasonably believed that their tips would go to workers, not the company’s bottom line,” Racine said in announcing the suit. “We are filing suit to put a stop to this deceptive practice and secure monetary relief for those harmed by DoorDash’s actions.”
Racine said DoorDash engaged in “a deceptive payment model” in which the company used tips that consumers thought were going directly to delivery people to cover the company’s own payments to workers. Under this practice, Racine said, the more a customer tipped on an order, the less DoorDash actually paid its delivery staff, whom the company calls “Dashers.”
The suit was filed in the Superior Court of the District of Columbia.
The claims in the suit echo those made in a New York Times report published in July, in which a reporter for the newspaper spent time working for delivery apps including DoorDash, Uber Eats and Postmates, and documented his experiences with those companies. That report found that DoorDash was offering its drivers a set amount for a given order, but then subsidized that payment with tips customers paid through DoorDash’s app — so instead of giving a delivery person that tip as a bonus, as is common practice with gratuity payments, DoorDash would include the money as part of the worker’s guaranteed delivery payment fee.
In a statement Tuesday, a DoorDash spokesperson said “we strongly disagree with and are disappointed by the action taken today,” and called Racine’s charges “without merit and we look forward to responding to them through the legal process.”
“We publicly disclosed how our previous pay model worked in communications specifically created for Dashers, consumers, and the general public starting in 2017,” the spokesperson added. “We’ve also worked with an independent third party to verify that we have always paid 100% of tips to Dashers.”
