DoorDash to pay New York delivery workers $17 mn for using their tips

Drivers in New York state who claimed that DoorDash had defrauded them of their tips by using them as basic pay would get close to $17 million from the US delivery service, officials announced Monday.

The office of New York Attorney General Letitia James estimates that the $16.8 million settlement will benefit about 63,000 delivery workers.

In the past, DoorDash “used customer tips to offset the base pay it had already guaranteed to workers, instead of giving workers the full tips they rightfully earned,” according to James’s office.

Deliverers who worked in New York state between May 2017 and September 2019, when the program was in effect, are covered by the settlement.

Before each trip, drivers, known as a “Dashers,” would see the guaranteed base pay they would receive for a given delivery before accepting it.

If the customer gave the driver a tip, it would be applied towards the amount the driver had been guaranteed by the company, rather than on top of that sum.

For example, if DoorDash guaranteed a driver would receive $10, but the Dasher was then given a $4 tip, the delivery person would receive $10 instead of $14, with the company only paying that person $6.

The system was used despite customers being told upon checkout that “Dashers will always receive 100 percent of the tip,” James’s office said, adding that disclosures about the payment system were either buried online or inaccessible.

“DoorDash misled customers who generously tipped and deceived Dashers who deserved to be paid in full,” James said.

Over 11 million delivery orders were placed with DoorDash in New York during that time, according to her office.

Following similar legal action, the business agreed to pay over $11 million to delivery drivers in the Midwest state of Illinois last November.

DoorDash expressed its satisfaction at having “resolved this years-old matter” and its anticipation of “continuing to offer a flexible way for millions of people to reach their financial goals” in a statement that was quoted by the New York Times.