The payments, part of a settlement with the New York attorney general’s office over a practice that ended in 2019, will return as much as $14,000 to some workers.
The payments, part of a settlement with the New York attorney general’s office over a practice that ended in 2019, will return as much as $14,000 to some workers.
The payments, part of a settlement with the New York attorney general’s office, will return as much as $14,000 to some workers.
In the early days of the food-delivery-app explosion, DoorDash came up with a novel way to process tips customers gave to workers: It effectively kept the money for itself.
The practice, in place for more than two years, eventually led to an outcry. In 2019, DoorDash halted it. But Dashers, as the app’s workers are called, were still out the money that the company had withheld from them.
On Monday, the New York attorney general’s office announced that DoorDash would pay $16.8 million in restitution to Dashers. The money will be spread among as many as 63,000 workers, and though many will receive amounts in the low thousands, some will receive as much as $14,000, said a spokeswoman for Attorney General Letitia James.
DoorDash agreed to similar settlements of $2.5 million in Washington, D.C., in 2020, and $11.25 million in Illinois last year.
This is how the old system worked: If DoorDash guaranteed a worker $7 for delivery and a customer did not tip, DoorDash would pay the worker the whole $7. If the customer tipped, say, $3, then DoorDash would pay the worker only $4, then add on the $3 tip so that the worker would still get just $7.
“Customers had no way of knowing that DoorDash was using tips to reduce its own costs,” the attorney general’s office said in a statement, adding that the fine print about where the tip was actually headed was “buried in online documents.”
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