DoorDash to pay NY delivery workers $17m for using their tips
Some 63,000 delivery workers stand to benefit from the $16.8 million settlement, according to the office of New York Attorney General Letitia James
US delivery service DoorDash will give nearly $17 million to drivers in New York state who accused the company of swindling them out of tip money by applying it towards their base pay, officials said Monday.
Some 63,000 delivery workers stand to benefit from the $16.8 million settlement, according to the office of New York Attorney General Letitia James.
DoorDash formerly "used customer tips to offset the base pay it had already guaranteed to workers, instead of giving workers the full tips they rightfully earned," James's office said.
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The settlement applies to deliverers who worked in New York state between May 2017 and September 2019, when the scheme was in place.
Before each trip, drivers, known as a "Dashers," would see the guaranteed base pay they would receive for a given delivery before accepting it.
If the customer gave the driver a tip, it would be applied towards the amount the driver had been guaranteed by the company, rather than on top of that sum.
For example, if DoorDash guaranteed a driver would receive $10, but the Dasher was then given a $4 tip, the delivery person would receive $10 instead of $14, with the company only paying that person $6.
The system was used despite customers being told upon checkout that "Dashers will always receive 100 percent of the tip," James's office said, adding that disclosures about the payment system were either buried online or inaccessible.
"DoorDash misled customers who generously tipped and deceived Dashers who deserved to be paid in full," James said.
According to her office, more than 11 million delivery orders were placed with DoorDash in New York during the time period.
Last November, the company agreed to pay more than $11 million to delivery drivers in the Midwest state of Illinois, following similar legal action.
In a statement cited by the New York Times, DoorDash said it was "pleased to have resolved this years-old matter" and looked forward "to continuing to offer a flexible way for millions of people to reach their financial goals."
