In the beginning, when food delivery apps were on the rise, DoorDash had a surprising way of handling tips. Instead of giving all the tips to the delivery workers, the company kept some of the money for itself. This went on for over two years until customers and workers started to notice and voice their concerns.
In 2019, DoorDash decided to change its policy. However, many Dashers, the delivery workers, still missed out on the money DoorDash had held back. Recently, the New York attorney general announced that DoorDash will pay $16.8 million in restitution to those affected. This money will be divided among potentially 63,000 workers. Some Dashers might get a small amount, while others could receive up to $14,000, according to a spokesperson for Attorney General Letitia James.
This isn’t the first time DoorDash has faced legal action over its tipping policy. The company agreed to pay $2.5 million in Washington, D.C., in 2020 and $11.25 million in Illinois last year for similar reasons.
So, how did the old tip system work? If DoorDash promised a worker $7 for a delivery and no customer tipped, the worker received the full $7. But if they did get a tip of, say, $3, DoorDash would only pay the worker $4, keeping the customer’s tip to lower its costs. This was not clear to customers, as the truth about how tips were managed was buried in complicated online documents.
The situation has sparked a bigger conversation about fairness and transparency in the gig economy. Workers deserve to know how their earnings are calculated, especially when it involves tips from customers. DoorDash’s recent settlement highlights the importance of accountability and the need for clearer practices in food delivery services.
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Delivery Services,Mobile Applications,Compensation for Damages (Law),Attorneys General,Wages and Salaries,Labor and Jobs,Suits and Litigation (Civil),Tips and Tipping,DoorDash (Mobile App),James, Letitia,New York City
