DoorDash to settle New York lawsuit over deceptive tipping practices by paying $17 million

DoorDash has reached an settlement with the New York Legal professional Normal over an outdated follow whereby the corporate used clients' tricks to subsidize its drivers' pay. Because the workplace of New York AG Letitia James explained, its investigation had revealed that DoorDash wasn't giving its drivers the ideas clients despatched them by way of the app from Could 2017 by way of September 2019. Now, the corporate can pay $16.75 million in restitution that shall be divided between 63,000 drivers. The Legal professional Normal instructed The New York Times that numerous drivers will obtain funds within the low hundreds, however some will get as a lot as $14,000.

Throughout the two-year interval talked about above, the service promised Dashers a assured pay for every supply. When clients checked out an order, they noticed a message that stated: "Dashers will all the time obtain 100% of the tip." Most clients studying that may take it as their driver will get what they have been tipping them on high of their fee. As an alternative, the service used their tricks to cowl the drivers' assured pay. If a buyer tipped $6 for an order with a assured fee of $10, for example, DoorDash would solely pay $4 out of its personal pocket. Meaning the motive force would nonetheless solely get $10 as an alternative of $16.

"DoorDash misled clients who generously tipped and deceived Dashers who deserved to be paid in full. This settlement returns hundreds of thousands to the pockets of hardworking Dashers and ensures transparency in DoorDash’s fee practices going ahead," James stated in an announcement. In 2020, DoorDash additionally settled the same lawsuit in Washington, DC for $2.5 million. It settled another lawsuit of the same nature in Illinois final yr for $11.25 million.

The corporate ended its unfair tipping practices in 2019. In New York, app-based supply firms at the moment are required to pay their drivers a minimal wage that's at the moment set to $19.56 per hour, not together with the ideas they get from clients.

This text initially appeared on Engadget at https://www.engadget.com/apps/doordash-to-settle-new-york-lawsuit-over-misleading-tipping-practices-by-paying-17-million-143018965.html?src=rss

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