The popular food delivery service DoorDash is accused in a lawsuit of obtaining the tips given for its delivery workers, after encouraging its customers to tip for deliveries.
D.C. Attorney General Karl A. Racine announced on November 19 that he filed the lawsuit, “seeking to recover from DoorDash millions of dollars in tip money that consumers thought they were paying to workers, and to impose civil penalties.”
The San Francisco-based firm has allegedly been following “deceptive” financial policies and keeping tips from its workers.
According to the lawsuit, DoorDash caused its consumers to believe that any tips would go directly to food delivery workers, while the sums were transferred to the company’s wallet as extra profit.
“DoorDash misled consumers, who reasonably believed that their tips would go to workers, not the company’s bottom line,” AG Racine was quoted as saying in his office’s statement. “We are filing suit to put a stop to this deceptive practice and secure monetary relief for those harmed by DoorDash’s actions.”
Racine’s office launched an investigation into the $13 billion firm’s practices about tips in March. DoorDash announced some changes to its tipping policy in August. However, the lawsuit claims that the “deceptive” practices continued even after the announcement.
“DoorDash misled consumers to believe that they were using DoorDash’s online delivery service to tip the company’s workers who delivered their food,” the lawsuit said. “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 aims at forcing the company to pay civil penalties for violating D.C.’s consumer protection laws and return the lost tips.