DoorDash Used Customer Tips to Offset Workers’ Base Pay Rather Than Pay Them the Full AmountMore Than 60,000 New York Delivery Workers May Be Eligible to Receive Restitution Payment from DoorDashNew York Attorney General Letitia James announced a $16.75 million settlement with delivery platform DoorDash for misleading both consumers and delivery workers (known as “Dashers”) by using tips intended for Dashers to subsidize their guaranteed pay. Between May 2017 and September 2019, DoorDash used a guaranteed pay model that let Dashers see how much they would be paid before accepting a delivery. An Office of the Attorney General (OAG) investigation found that under this model, 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. DoorDash will pay $16.75 million in restitution for Dashers and up to $1 million in settlement administrator costs to help issue the payments.
“Delivery workers are integral to our communities, working tirelessly to bring food and other essentials directly to our doorsteps in all conditions,” said Attorney General James. “DoorDash misled customers who generously tipped and deceived Dashers who deserved to be paid in full. This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward. My office will continue to protect New York workers from deceptive business practices and ensure they receive all of the money they’ve earned.”
The OAG investigation found that under DoorDash’s deceptive pay model, workers were only able to see their tips if they were greater than the amount DoorDash had already guaranteed to pay them for the order. DoorDash would always pay a minimum of $1 to the Dasher and would use the tips paid by the customer to offset the rest of the amount guaranteed to the delivery worker.
For example, for orders with a guaranteed amount of $10:
- If a customer tipped $0, DoorDash would pay $10 ($1 + $9 remainder). The Dasher received $10.
- If a customer tipped $3, DoorDash would pay $7 ($1 + $6 remainder). The Dasher still only received $10.
- If a customer tipped $6, DoorDash would pay $4 ($1 + $3 remainder). The Dasher still only received $10.
- If a customer tipped $9, DoorDash would pay $1 ($1 + $0 remainder). The Dasher still only received $10.
- If the customer tipped $11, DoorDash would pay $1 ($1 + $0 remainder).The Dasher only received $12.
Customers were misled into believing their tips would directly benefit Dashers. Instead, DoorDash would keep the tips meant for Dashers and take it out of their guaranteed pay. DoorDash would guarantee pay to a delivery worker, and then only actually pay them whatever the tip did not cover.
DoorDash also failed to clearly disclose these practices to customers and Dashers. At checkout, customers were encouraged to tip with a message reading “Dashers will always receive 100 percent of the tip.” Disclosures about the use of tips were buried in online documents and inaccessible during critical moments in the ordering process. Customers had no way of knowing that DoorDash was using tips to reduce its own costs.
Attorney General James has secured $16.75 million in restitution from DoorDash, which a settlement administrator engaged by OAG will distribute directly to Dashers affected by the deceptive pay model, providing them the compensation they were denied. Any worker who delivered for DoorDash between May 2017 and September 2019 in New York state may be eligible to file a claim for this settlement. During that period, New Yorkers placed more than 11 million delivery orders with DoorDash and approximately 63,000 New York delivery workers stand to benefit from this settlement. Payments are expected to begin in early 2025. Eligible drivers will be contacted by the settlement administrator via mail, email, and/or text with notices of the settlement and information on how to file a claim.
In addition to the restitution fund, DoorDash must:
- Revise Payment Practices: DoorDash is required to maintain a pay model that ensures consumer tips are paid to Dashers in their entirety, without impacting DoorDash’s contribution to guaranteed pay.
- Enhance Transparency: The company must clearly disclose pay policy details to both Dashers and consumers, and share a breakdown of base pay, promotional bonuses, and tips with Dashers for every delivery.
- Improve Dash History Access: Dashers, including those deactivated, will have access to their delivery history for at least four years.
“This settlement shows the scale at which DoorDash steals from its workers and the scale at which it lies,” said Ligia Guallpa, Executive Director of Worker’s Justice Project and Co-founder of Los Deliveristas Unidos. “And when you steal and lie at this scale, it’s systemic, it’s baked into your business model. And a business model that requires you to steal from workers and customers is a failure. New York City sees what we’re up against and how much more work there is to do to fight back against the predatory labor practices that this industry is built on. But this also shows the collective power of workers and what we can accomplish when we’re united in solidarity with each other and with allies who are willing to hold exploiters accountable. Thank you Attorney General James for being a true friend to workers. And shame on you, DoorDash! While they lie and steal at scale, we are organizing at scale and building collective worker power. We are grateful to have the New York State Attorney General in this fight as we expand our efforts to hold these app companies accountable. We won’t stop fighting to ensure the dignity and respect these workers deserve.”
New York Attorney General Letitia James announced a $16.75 million settlement with delivery platform DoorDash for misleading both consumers and delivery workers (known as “Dashers”) by using tips intended for Dashers to subsidize their guaranteed pay. Between May 2017 and September 2019, DoorDash used a guaranteed pay model that let Dashers see how much they would be paid before accepting a delivery. An Office of the Attorney General (OAG) investigation found that under this model, 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. DoorDash will pay $16.75 million in restitution for Dashers and up to $1 million in settlement administrator costs to help issue the payments.
“Delivery workers are integral to our communities, working tirelessly to bring food and other essentials directly to our doorsteps in all conditions,” said Attorney General James. “DoorDash misled customers who generously tipped and deceived Dashers who deserved to be paid in full. This settlement returns millions to the pockets of hardworking Dashers and ensures transparency in DoorDash’s payment practices going forward. My office will continue to protect New York workers from deceptive business practices and ensure they receive all of the money they’ve earned.”
The OAG investigation found that under DoorDash’s deceptive pay model, workers were only able to see their tips if they were greater than the amount DoorDash had already guaranteed to pay them for the order. DoorDash would always pay a minimum of $1 to the Dasher and would use the tips paid by the customer to offset the rest of the amount guaranteed to the delivery worker.
For example, for orders with a guaranteed amount of $10:
- If a customer tipped $0, DoorDash would pay $10 ($1 + $9 remainder). The Dasher received $10.
- If a customer tipped $3, DoorDash would pay $7 ($1 + $6 remainder). The Dasher still only received $10.
- If a customer tipped $6, DoorDash would pay $4 ($1 + $3 remainder). The Dasher still only received $10.
- If a customer tipped $9, DoorDash would pay $1 ($1 + $0 remainder). The Dasher still only received $10.
- If the customer tipped $11, DoorDash would pay $1 ($1 + $0 remainder).The Dasher only received $12.
Customers were misled into believing their tips would directly benefit Dashers. Instead, DoorDash would keep the tips meant for Dashers and take it out of their guaranteed pay. DoorDash would guarantee pay to a delivery worker, and then only actually pay them whatever the tip did not cover.
DoorDash also failed to clearly disclose these practices to customers and Dashers. At checkout, customers were encouraged to tip with a message reading “Dashers will always receive 100 percent of the tip.” Disclosures about the use of tips were buried in online documents and inaccessible during critical moments in the ordering process. Customers had no way of knowing that DoorDash was using tips to reduce its own costs.
Attorney General James has secured $16.75 million in restitution from DoorDash, which a settlement administrator engaged by OAG will distribute directly to Dashers affected by the deceptive pay model, providing them the compensation they were denied. Any worker who delivered for DoorDash between May 2017 and September 2019 in New York state may be eligible to file a claim for this settlement. During that period, New Yorkers placed more than 11 million delivery orders with DoorDash and approximately 63,000 New York delivery workers stand to benefit from this settlement. Payments are expected to begin in early 2025. Eligible drivers will be contacted by the settlement administrator via mail, email, and/or text with notices of the settlement and information on how to file a claim.
In addition to the restitution fund, DoorDash must:
- Revise Payment Practices: DoorDash is required to maintain a pay model that ensures consumer tips are paid to Dashers in their entirety, without impacting DoorDash’s contribution to guaranteed pay.
- Enhance Transparency: The company must clearly disclose pay policy details to both Dashers and consumers, and share a breakdown of base pay, promotional bonuses, and tips with Dashers for every delivery.
- Improve Dash History Access: Dashers, including those deactivated, will have access to their delivery history for at least four years.
“This settlement shows the scale at which DoorDash steals from its workers and the scale at which it lies,” said Ligia Guallpa, Executive Director of Worker’s Justice Project and Co-founder of Los Deliveristas Unidos. “And when you steal and lie at this scale, it’s systemic, it’s baked into your business model. And a business model that requires you to steal from workers and customers is a failure. New York City sees what we’re up against and how much more work there is to do to fight back against the predatory labor practices that this industry is built on. But this also shows the collective power of workers and what we can accomplish when we’re united in solidarity with each other and with allies who are willing to hold exploiters accountable. Thank you Attorney General James for being a true friend to workers. And shame on you, DoorDash! While they lie and steal at scale, we are organizing at scale and building collective worker power. We are grateful to have the New York State Attorney General in this fight as we expand our efforts to hold these app companies accountable. We won’t stop fighting to ensure the dignity and respect these workers deserve.”
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