DoorDash is coughing up nearly $17 million in settlement after getting busted for using drivers’ tips to cover their wages. Yep, you read that right.
Between May 2017 and September 2019, the food delivery giant took customers’ tips and used them to subsidize drivers’ base pay, instead of passing the full amount on to the drivers aka Dashers. And New York Attorney General Letitia James wasn’t having it.
How It Went Down
Here’s the deal: Customers thought they were tipping Dashers directly. Turns out, DoorDash was sliding those tips into the drivers’ base pay, which lowered the company’s payroll costs. “This is just fundamentally unfair,” said James. “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’s Response
DoorDash, of course, says the whole thing is old news. “The allegations settled were related to an old pay model that was retired in 2019,” said a spokesperson. “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.”
What Dashers Get
Under the settlement, Dashers will get clearer payment disclosures through their app before accepting delivery orders. Plus, the nearly $17 million settlement will go straight into Dashers’ pockets finally. James made it clear: “This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward.”
How to Claim Your Money
If you were a Dasher in New York between 2017 and 2019, you might be eligible for a payout. James’ office will soon roll out a website with all the details on how to file a claim. “We have your back,” she said, urging eligible workers to submit their claims once the site is live.
DoorDash’s tip-skimming days may be over, but the payout is just beginning. If you dashed in New York during those years, keep an eye out for the claims website – there’s cash with your name on it. And for everyone else? Rest easy knowing your tips are actually going to the people delivering your late-night snacks.
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