(NEW YORK CITY) - – New York State Attorney General Letitia James has 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.

Attorney General James said: “Delivery Workers are integral to our communities, working tirelessly to bring food and other essentials directly to our doorsteps in all conditions. DoorDash misled customers who generously tipped and deceived Dashers who deserved to be paid in full. This settlement returns millions to the pockets of hard-working Dashers and ensures transparency in DoorDash’s payment practices going forward.”

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. 

To Continue Reading This Labor News Report, Go To: Attorney General James Secures $16.75 Million from DoorDash for Cheating Delivery Workers Out of Tips