Washington, D.C. Attorney General Karl Racine is suing popular delivery company DoorDash, saying the company didn’t adequately distribute tips nor did it retroactively pay back those tips when its practices were changed, according to a report by TechCrunch.
The investigation into the tipping practices of DoorDash was started in March of this year. The lawsuit claims DoorDash users paid millions in tips, and the company used those tips to offset worker payments instead of giving them directly to the workers, for a period of two years.
The lawsuit is seeking damages and back pay for workers.
“We strongly disagree with and are disappointed by the action taken today,” a DoorDash spokesperson said. “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 percent 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 initially doubled down on the way it pays workers, but then in July announced it would change its payment model. The company said in August that it wasn’t going to pay workers back for lost wages.
“There’s no ‘back pay’ at issue here because every cent of every tip on DoorDash has always gone and will always go to Dashers,” a DoorDash spokesperson said at the time.
Grocery delivery service Instacart changed its tipping policy this year as well, and it sent workers back pay when the tips were included in minimum pay.
DoorDash, along with Uber and Lyft, is fighting back by pushing a ballot initiative that would keep it from having to upgrade its employees from 1099 independent contractors to W-2 workers, which would make them eligible for a variety of guarantees, like health insurance and protection from sexual discrimination.
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