Food delivery app DoorDash will have to pay New York-based workers nearly $17 million for unfairly using customer tips to cover its workers’ wages, rather than letting drivers keep tips in addition to their set pay, The Associated Press reported.
During a news conference on Feb. 24, state Attorney General Letitia James said the company allegedly guaranteed delivery workers a base pay for each delivery but failed to factor in tips between May 2017 and September 2019.
As a result, DoorDash cut workers’ pay short, paying workers for whatever the tips didn’t cover. James
called the move “fundamentally unfair,” while claiming DoorDash didn’t make it clear to customers that tips would be used to offset worker wages. “Customers had no reason to believe that these tips were being used by DoorDash to reduce its costs,” she said.As a result, the company settled to pay out $16.75 million to more than 60,000 eligible workers, with each one receiving up to $14,000, according to The Washington Post. Eleven million orders were placed through DoorDash during the time period listed in the settlement
. After the company ended the seemingly controversial practice in 2019, the company still received backlash as the secret practice “misled their customers and shortchanged the very people who made their business model possible,” James continued.Delivery worker and member of the Worker Justice Project’s Los Deliveristas Unidos, William Medina, labeled the settlement as a recognition of “our humanity, our labor and our dignity.”
“We proved that we are not just numbers on their platform,” he said at the news conference. “We are a powerful, essential workforce.”
However, DoorDash continues to argue that their “practices properly represented how Dashers were paid during this period”
but stated they 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.” James, who is set as an administrator, will oversee how the funds are dispersed, contact potential beneficiaries, and set up a website for delivery workers to learn more about how to apply for a share of the settlement money.The Democratic litigator has established herself as an advocate of the people of New York, fighting for citizens she feels have been wronged by big business.
In addition to several other major lawsuits, James once sued SiriusXM Radio over accusations of intentionally making it difficult for customers to cancel their subscriptions. An investigation found customers would be pushed to keep their subscriptions — ultimately keeping money in Sirius’ pockets — after having to wait a long period of time to speak to an agent.RELATED CONTENT: DoorDash Launches Pilot Program In Georgia With Potential Benefits For Drivers