Washington, D.C., Attorney General Karl Racine brought charges against DoorDash Tuesday, accusing the company of pocketing tips meant for workers and misleading customers about where their money was going.
Racine is seeking to recover millions of dollars in tip money customers paid through DoorDash over two years under its previous model, which the attorney general’s office called “deceptive.”
DoorDash is not the only gig economy company that has faced backlash for its tipping policies. An NBC News report in February said Instacart used a similar practice to subsidize worker pay with tips up to the guaranteed $10 per-job minimum. The company changed its policy following a petition from workers.
The charges follow an investigation Racine’s office launched in March which found DoorDash used customers’ tips to offset the company’s payments to workers. A report from Recode at the time explained that DoorDash offers its delivery workers a guaranteed amount they will be paid for an order before accepting, but later subsidizes that amount with tips customers pay through the app. Rather than serve as a bonus for workers, the report said, customer tips went to DoorDash to offset workers’ base pay.
DoorDash said over the summer it was changing its tipping model after public backlash.
“Every dollar customers tip will be an extra dollar in their Dasher’s pocket, and customers will be able to tip at checkout or after the delivery," the company said an announcement.
A spokesperson for Racine’s office said it is the first attorney general’s office to take action against DoorDash.
