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DoorDash sued over deceptive tipping policy
San Francisco-based delivery outfit DoorDash Inc. was sued on Tuesday by Washington D.C. Attorney General Karl Racine for deceptive practices regarding its tipping policy.
The complaint, lodged at the Superior Court of the District of Columbia, accuses the company of the deceptive practices from July 2017 to September 2019.
Earlier this year, DoorDash changed its tipping policy after it was discovered that workers were coming up short on tips. After the change, the company said, “Dashers” would get every cent of the tip given. Nonetheless, Racine is now seeking millions on lost tip money, stating no drivers had been compensated.
“DoorDash misled consumers to believe that they were using DoorDash’s online delivery service to tip the company’s workers who delivered their food,” said the complaint. “Instead, the ‘tip’ largely went to subsidize DoorDash’s agreed payment to the worker and almost never served to increase that payment amount.”
The lawsuit states that the tipping policy was “confusing” and “misleading,” given that customers believed they were being generous to the delivery worker when in fact a large tip would make no difference to the worker’s pay.
“Any reasonable consumer would have expected that the ‘tip’ they added to the delivery charge through the DoorDash checkout screenflow would be provided to the Dasher on top of the payment promised by DoorDash for the delivery,” said the complaint.
DoorDash responded quickly to the lawsuit. The company said in a statement that it was disappointed the complaint had been lodged, adding that the accusation has no merit.
“Transparency is of paramount importance, which is why we publicly disclosed how our previous pay model worked in communications specifically created for Dashers, consumers and the general public starting in 2017,” said DoorDash. “We’ve also worked with an independent third party to verify that we have always paid 100% of tips to Dashers.”
When the previous policy was first criticized, the company said it was done in the interests of fairness. Since some Dashers did not receive tips, DoorDash said giving a guaranteed amount when a customer didn’t leave a tip seemed like the right thing to do. That was in spite of not telling the customer about this policy.
Photo: Mark Wilkie/Flickr
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