DoorDash Tipping Settlement Will Pay $2.5 Million to Delivery Workers, City, and Charities
DoorDash’s controversial former tipping policy has finally led to legal ramifications–in Washington, D.C., at least. Last year, the way tips were being handled by a number of delivery services–initially grocery delivery app Instacart and later restaurant delivery app DoorDash–came under scrutiny after revelations that the amount a customer tips could affect how much the service itself paid drivers. By August, DoorDash announced an updated tipping policy, but D.C. Attorney General Karl A. Racine still opted to sue the company for the two years he claimed DoorDash had deceived customers with their policy up until that point. Yesterday, Racine declared victory.
In a $2.5 million settlement announced by the District Attorney’s Office, DoorDash has agreed to pay $1.5 million in relief to delivery workers, $750,000 to the District of Columbia, and two $250,000 donations to area charities. DoorDash also agreed to maintain a tipping policy that ensures all tips go to workers while providing “clear and easy-to-access information about its policies and payment model to workers and consumers,” the announcement said.
“[This] settlement rights a wrong that deceived D.C. consumers and deprived workers of monies that they should have been paid,” Racine explained. “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.”
“We're pleased to have this issue behind us, and thank the Office of the Attorney General for D.C. for its work throughout this process,” DoorDash said in a statement provided to Restaurant Dive. “Our focus is on continuing to support Dashers, restaurants, and customers in DC and around the country.”Meanwhile, though DoorDash may have conceded defeat in D.C., November hasn’t been all bad news for the service. Earlier this month, California voters approved Proposition 22 which exempts app-based delivery companies from providing employee benefits to drivers, a victory which will likely save apps like DoorDash more money than dubious tipping practices ever could.