Attorney General Karl A. Racine announced a settlement with DoorDash, Inc., a food delivery service, requiring it to pay $2.5 million to resolve allegations that it misled D.C. consumers and used tips left for workers to boost the company’s bottom line.
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A awsuit, the Office of the Attorney General (OAG) alleged that from 2017 until 2019, DoorDash misled consumers to believe that their tips would increase worker pay, when, in fact, tips were used to subsidize DoorDash’s payments to its workers.
DoorDash has since revised its tips policy.
As part of the settlement, DoorDash will pay $1.5 million in relief to delivery workers, pay $750,000 to the District, and donate $250,000 to two District charities.
The company will also be required to maintain a payment model that ensures all tips go to workers without lowering their base pay, and it will be required to provide clear and easy to access information about its policies and payment model to workers and consumers.
Under the terms of the settlement, DoorDash will be required to:
Pay $1.5 million to affected workers: DoorDash will pay $1.5 million to workers who made deliveries to consumers in the District of Columbia while the company’s deceptive tipping policy was in place.
Pay $750,000 to the District: The company’s payment will in part cover the District’s cost of investigating and litigating this matter.
Pay $250,000 to District charities: DoorDash will donate $125,000.00 to N Street Village, which supports homeless and low income women, and $125,000.00 to the Hook Hall Helps/Restaurant Association Metropolitan Washington Worker Relief Fund, which supports restaurant workers affected by the COVID 19 pandemic.
Ensure tips go directly to workers: DoorDash will maintain a worker payment model that ensures that the entirety of consumer tips are distributed to workers, and that a consumer’s tip does not have any effect on the base amount paid by DoorDash to workers.
Provide clear and easy to access information to consumers and worker. ■