DoorDash Settles for $16 Million Over Tip Mismanagement

DoorDash now has to dish out some major cash after being accused of using New York workers’ tips to cover wages. According to reports, the delivery service agreed to a $16.75 million settlement.

New York Attorney General Letitia James said an investigation done by her office found that between May 2017 and September 2019, DoorDash guaranteed workers a base payment for each delivery, but factored in customer tips into that amount, ultimately only paying workers for what the tips didn’t cover. Attorney James also accused the delivery service of misleading customers by suggesting tips went directly to workers, when it reality it didn’t.

“This is just fundamentally unfair,” James said. “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.”

When the company was asked to comment on the case, a DoorDash spokesperson said the brand “remains committed to making sure that Dasher earnings are always fair and transparent.”

The spokesperson went on to say that, “the allegations settled were related to an old pay model that was retired in 2019. 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 million-dollar settlement will be paid out to affected New York dashers.