DoorDash will pay almost $17 million to settle claims that it unfairly used customer tips to subsidize the wages of its delivery workers in New York, rather than letting drivers keep the tips on top of their guaranteed pay, state Attorney General Letitia James said Monday. Per the AP, James said DoorDash used the wage model between May 2017 and September 2019, in which the company would guarantee workers a base payment for each delivery but was factoring tips into that equation, only paying workers for whatever the tips didn't cover, according to James.
The AG explained the "bait and switch" scheme on X thusly: "If DoorDash guaranteed a worker $10, and a customer tipped $3, that worker was only paid $10, with DoorDash using the tip to meet its guaranteed pay." James added, "DoorDash's deceptive model tricked our workers to line its own pockets." She noted that the company also didn't make it clear to its employees that that's how they were being paid. This all took place despite DoorDash's notice that popped up at checkout saying, "Dashers will always receive 100 percent of the tip," per the New York Times.
Current and ex-workers who may fall under the settlement's umbrella will be contacted by a settlement administrator. A spokesperson for James says that as many as 63,000 workers may be eligible for a portion of what DoorDash pocketed, with payments per individual ranging from a few thousand to up to $14,000, per the Times. "Today tastes like victory," the head of labor advocacy group Los Deliveristas Unidos tells the paper.
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Meanwhile, DoorDash, which says it no longer pays wages that way, says it's "pleased" to have settled the matter, even though "we believe that our practices properly represented how Dashers were paid during this period," per the AP. It's not clear if the company will offer restitution to workers in other states as well. (More DoorDash stories.)
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