DoorDash to Pay $17M to Delivery Workers Over Tip Usage

DoorDash Reaches Settlement Over Alleged Tip Misappropriation

DoorDash has reached an agreement to pay $16.75 million to resolve a legal challenge brought forth by the Attorney General of New York.

The core of the dispute centered around accusations that the delivery service was improperly utilizing worker tips to subsidize guaranteed wages.

Details of the Lawsuit

The legal complaint asserted that, spanning from May 2017 to September 2019, DoorDash employed customer tips as a means to reduce its obligation to provide a predetermined base pay to its delivery personnel.

Instead of supplementing worker earnings with the full amount of tips received, the company allegedly used these funds to offset previously committed wage payments.

Furthermore, the lawsuit contended that customers were given a false impression, believing their tips were directly passed on to the delivery workers.

Impact of the Settlement

Approximately 63,000 DoorDash delivery workers located in New York are expected to receive benefits from this settlement.

DoorDash's Response

DoorDash issued a statement to TechCrunch, affirming its dedication to ensuring equitable and transparent earnings for its Dashers.

The company clarified that the allegations pertain to a previous compensation structure that was discontinued in 2019.

“We are committed to fair and transparent Dasher earnings, and the settled allegations concerned a former pay model that was phased out in 2019,” the statement read.