DoorDash to Pay $2.5 Million Settlement for Allegedly Mishandling Dasher Tip Money
Written by AskTheLawyers.com™
A recent lawsuit alleged that DoorDash misrepresented the way their drivers, referred to as “Dashers”, were paid, particularly in regard to consumer tips. Although the company continues to deny all allegations of pay misrepresentation, they agreed to settle for a total of $2.5 million with the Washington, D.C. attorney general’s office to be paid out to Dashers, charities, and legal representatives.
According to the original lawsuit, DoorDash allegedly used customer tips to subsidize Dasher pay.
According to the complaint, this popular food-running company was allegedly using tips from customers to help pay Dashers’ baseline wages, instead of giving their drivers the entirety of the tip on top of their normal wages. If this is true, it is reasonable to assume that customers and Dashers alike were unaware of the practice, and were under the impression that Dashers would receive the entirety of customer tips on top of their base pay, since this is the way tipping models work across most industries.
The court issued an injunction ensuring that Dashers will receive the entirety of their tips on top of base pay in the future.
While an admission of the allegedly poor business conduct was never issued, according to the official consent order, the D.C. court settled the matter by issuing an injunction requiring that DoorDash clearly inform Dashers and customers alike of the Dasher Pay Model, and that consumer tips would be distributed in their entirety to the Dasher, and not affect any amount paid by DoorDash to the Dasher for their driving and delivery services.
With gig-work increasingly important to the U.S. economy and livelihoods, it is imperative that delivery drivers receive fair pay via comprehensive payment models.
In the wake of the COVID-19 pandemic, gig-work like that of DoorDash workers has become increasingly important to the economy and to sustaining livelihoods. Independent contracting work like that of many food delivery drivers allows people the flexibility and opportunity to work desired hours in desired locations, and has been a bit of a godsend to many unemployed workers during the pandemic. While many industries have taken a significant hit, delivery services like DoorDash have only become increasingly popular, benefiting customers, restaurants, and workers alike, assuming that fair business practices remain at the forefront of this and similar companies’ goals.
However, with the rise in popularity and increase in employment with food-running companies, it seems likely that this will not be the last lawsuit of its kind, ensuring that gig-workers receive fair pay and fair protections.