DoorDash Lawsuit: Company Accused Of Pocketing Tips, Misleading Customers

San Francisco-based food delivery company DoorDash is facing legal action for alleged misconduct regarding its tip system. Washington, D.C., Attorney General Karl Racine filed a lawsuit against the company wherein he accused them of pocketing tips that customers can choose to give drivers and misleading customers about what their money is being used for.

Racine’s suit is seeking upwards of a million dollars in stolen tips paid by customers over the last two years. Racine’s office launched an investigation in March into the company’s practices and found that the company was using tips to offset wages paid to drivers. A report from the time found that the company offered a base pay per order for its drivers and used tips from customers to offset the cost of that pay for the company.

“Any reasonable consumer would have expected that the ‘tip’ they added to the delivery charge through the DoorDash checkout screenflow would be provided to the Dasher on top of the payment promised by DoorDash for the delivery. But during the relevant time period, that was not the case,” the lawsuit stated. “Instead, DoorDash used consumer tips to subsidize the Guaranteed Amount payment it promised to Dashers.”

Reports of tipping criticism surfaced in July, as the New York Times and other publications noted that the company made changes after customer complaints.

DoorDash has come out strongly against this suit, assuring that they have worked to ensure drivers receive their tips.

“We strongly disagree with and are disappointed by the action taken today,” a spokesperson for DoorDash said in response to the suit. “Transparency is of paramount importance, which is why we publicly disclosed how our previous pay model worked in communications specifically created for Dashers, consumers and the general public starting in 2017. We’ve also worked with an independent third party to verify that we have always paid 100% of tips to Dashers. We believe the assertions made in the complaint are without merit and we look forward to responding to them through the legal process.”

Doordash, a privately held company founded in June 2013, is reportedly worth over $13 billion.