DoorDash to pay millions to dashers after company pocketed tips
New York's top prosecutor on Monday announced a nearly $17 million settlement with the delivery platform DoorDash for "misleading both consumers and delivery workers" by using tips intended for its drivers to subsidize their pay.
The online delivery platform, headquartered in San Francisco, used the wage model between May 2017 and September 2019 to pocket drivers' tips, according to court papers filed in the case.
New York Attorney General Letitia James said an investigation conducted by her office found DoorDash misled customers by pocketing tips intended for its drivers, dubbed Dashers, and added the funds to the driver's base pay, instead of providing them the full tips they earned.
“This is just fundamentally unfair,” James said during a news conference in Manhattan. ”Customers had no reason to believe that these tips were being used by DoorDash to reduce its costs...They knew it wasn't right and they did it anyway."
DoorDash responds
On Tuesday a DoorDash spokesperson told Paste BN the company "remains committed to making sure that Dasher earnings are always fair and transparent."
"The allegations settled were related to an old pay model that was retired in 2019," the spokesperson said. "While we believe that our practices properly represented how Dashers were paid during this period, we are pleased to have resolved this years-old matter and look forward to continuing to offer a flexible way for millions of people to reach their financial goals.”
'Delivery workers are integral to our communities'
Under the settlement, DoorDash will now provide Dashers "with an accessible disclosure that explains the disclosures that a Dasher will see in their mobile application before the Dasher chooses to accept a delivery order."
“Delivery workers are integral to our communities, working tirelessly to bring food and other essentials directly to our doorsteps in all conditions,” James said. "This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward.”
'We have your back': How to file a claim in New York DoorDash settlement
In the coming weeks, James said her office will provide information about how eligible delivery workers can file a claim to receive money from the settlement.
James said an administrator would set up a website regarding the claim.
"If you were a Dasher or delivery worker in New York between 2017 and 2019 you may be entitled to restitution. I urge all of you to file a claim," James said. "We have your back."
Natalie Neysa Alund is a senior reporter for Paste BN. Reach her at nalund@usatoday.com and follow her on X @nataliealund.