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DC, DoorDash reach $2.5 million settlement
Washington, D.C. settled with DoorDash for $2.5 million over allegations that the food delivery service misled consumers with its tipping system, the district's attorney general announced Tuesday.
D.C. Attorney General Karl Racine sued DoorDash in 2019 alleging that over the previous two years the company had been using tips to subsidize worker pay rather than giving it directly to drivers on top of baseline pay in violation of district laws.
DoorDash changed its tip payment system in September 2019. It continues to deny having violated D.C. consumer protection laws.
As part of the settlement, the company will pay $1.5 million in relief to delivery workers, pay $750,000 to the District and donate $250,000 to two local charities.
"Today's settlement rights a wrong that deceived D.C. consumers and deprived workers of monies that they should have been paid," Racine said in a statement. "We are pleased that DoorDash has changed its policies, and with this settlement has taken responsibility for its actions."
A spokesperson for DoorDash said they were "pleased to have this issue behind us."
"Our focus is on continuing to support Dashers, restaurants, and customers in DC and around the country," the company added.
The settlement may be a preview of what could come of a similar lawsuit filed by Racine against grocery delivery service Instacart this summer.
Instacart also changed its tipping system after an investigation.