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, charging the San Francisco-based meal delivery company with misleading consumers about their tips going to delivery people, and instead pocketing the money for its own benefit. Racine said the suit comes following an investigation his office launched in March of this year, and involves 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 their delivery people in order to cover payments to workers. Racine said that by doing this, the more a customer tipped on an order, the less DoorDash actually had to pay its delivery staff, whom the company calls "Dashers."
The suit was filed in the Superior Court of the District of Columbia.
DoorDash became the subject of criticism following a report in July from the New York Times in which a reporter wrote about his time spent doing deliveries for the likes of DoorDash, Uber Eats and Postmates. DoorDash was determined to be offering its drivers a guaranteed amount to be paid before they accepted an order, but then subsidizing that payment with tips customers set up to pay through DoorDash's app. Instead of giving a order deliverer that tip as a bonus, DoorDash would use it as part of its guaranteed delivery payment fee.
In a statement given to this news organization, 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."
The DoorDash spokesperson also said, "We publicly disclosed how our previous pay model worked in communications specifically created for Dashers, consumers, and the general public starting in 2017. We've also worked with an independent third party to verify that we have always paid 100% of tips to Dashers."
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