DoorDash has agreed to pay $16.8 million to delivery drivers in New York state after being accused of improperly using customer tips to reduce the company’s base pay for workers. The settlement benefits around 63,000 “Dashers” who worked in the state between May 2017 and September 2019.
New York Attorney General Letitia James announced the settlement, stating that DoorDash had applied tips towards the base pay drivers, which were already guaranteed, rather than adding the tips to their earnings as promised. For example, if a driver was guaranteed $10 for a delivery and received a $4 tip, DoorDash would only pay the driver $10, using the tip to reduce its own contribution.
The company had assured customers that drivers would receive 100 percent of the tip, but the payment system was poorly disclosed and misleading. The settlement comes after more than 11 million deliveries in New York during the period in question.
DoorDash previously reached a similar settlement in Illinois, agreeing to pay $11 million to drivers in the state. The company expressed relief in resolving the matter, looking forward to continuing to support workers with flexible earnings.
