The news is out: [DoorDash is paying $2.5 million to settle a lawsuit that accused the food delivery startup of misleading customers in how it issued tips for its drivers.
Washington DC Attorney General Karl Racine filed the lawsuit against DoorDash in November 2019, alleging that between 2017 and 2019, DoorDash reallocated millions of dollars in tips paid by customers to instead go toward drivers’ base pay. Racine called the model “deceptive” because it meant that those payments didn’t always go directly to the drivers. Many customers were not aware of the model when it became public.
The company refuted te claims, with a spokesperson saying the firm strongly disagreed with the 2019 lawsuit. DoorDash migrated to a new tipping model in September 2019, one that ensures that “100% of tips” goes to the drivers “on top of base pay and promotions.”
The terms of the settlement require DoorDash to pay “$1.5 million in relief to delivery workers, pay $750,000 to the District, and donate $250,000 to two District charities,” according to a press release issued by Racine’s office.]
It’s not always that obvious.