DoorDash Sued for Wrongfully Taking Tips from Drivers

The popular food delivery service DoorDash is being sued by DC Attorney General Karl Racine and private customers for allegedly deceiving customers with their tipping policy. DoorDash is a food delivery service that delivers meals from national chains and local restaurants alike. When a customer places an order with DoorDash, a customer has the ability to leave a tip for the delivery driver. The default tip is currently 10% of the order, but the user may also leave a custom tip.

DoorDash’s tipping policy had been in place since 2017, but it wasn’t mid-2019 that the first news reports came out. When a customer tipped through the app, that money would go toward the base rate instead of being tacked on top. Whenever tips were involved, DoorDash would pay less of that base rate.

In other words, the tips were used to help pay the driver’s normal rate and were not used to reward drivers for exemplary service. For instance, if DoorDash paid a worker $10 for delivery and a customer did not tip, then DoorDash would pay the worker $10. On the other hand, if the customer tipped $5, DoorDash would still only pay the worker $10.

Attorney General Racine claims this practice occurred from July 2017 until September 2019. The lawsuit seeks to impose civil penalties for DoorDash’s alleged deceptions. Although DoorDash changed its policy around August 2019, the Attorney General claims that DoorDash did not reimburse its workers or customers for all the missing tips. DoorDash said that it is now working with an independent third party to verify it always pays 100% of tips to delivery workers.

Several customers have also filed a class action lawsuit against DoorDash for these same alleged fraudulent practices. The class action lawsuit claims customers never would’ve paid the extra tip if they knew where the money was going, or rather not going. Although customers have begun tipping in cash, the plaintiffs in the class action suit are demanding their money back.

What is the Difference Between Contractors and Employees?

Like ride-sharing companies, DoorDash depends on the legal distinction between contractors and employees to avoid many employment laws, including minimum wage laws. DoorDash drivers are paid a specific amount per delivery rather than a fixed salary or an hourly rate.

DoorDash drivers set their own hours and can decide what jobs they want to do. A DoorDasher can always forgo jobs that are too far or the pay too small. In contrast, pizza delivery drivers must make all deliverers regardless of how far they are or how much they have to carry.

On the other hand, DoorDash drivers are using their own vehicles and mileage to transport food. The pizza delivery boy might be required to travel as far as his employer wants, but he or she is using a company vehicle and with company gas. DoorDash drivers subject their own vehicle to wear and tear and pay for gas out of their own pocket.

However, the distinction between contractors and employees may not impact whether the tips should be given to the drivers or the corporation. Employees are normally entitled to tips and if tips were included in the agreement, contractors would be entitled to tips as well. DoorDash’s app also implies that drivers are given tips and it is not explained anywhere that the amounts were given to the corporation instead.

Should DoorDash Drivers Speak to an Employment Lawyer?

However, the lawsuit is focused on customers rather than the drivers. If the Attorney General were to prevail, DoorDash would be fined by the District of Columbia. If the class action suit wins, customers would be compensated with lost tips and fines. DoorDash allegedly defrauded customers and might have broken D.C. laws as a result, but the real victims are not represented by either action.

Whether you are an employer or employee, an employment attorney can help you with a tip dispute. If you are an employer, an employment lawyer will make sure you are in compliance with State and Federal wage laws and may prevent a dispute from arising.