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When someone delivers food to your door, you give them a little extra cash for the effort. And you think that tip is going to the driver, on top of whatever the restaurant or delivery service is paying them.
Customers using DoorDash can tip their drivers through the app, and the extra money is making it to the driver, just not in the way you think. The company is facing a class action lawsuit that claims tips were diverted to pay drivers' salaries, rather than being a bonus on top of their base pay.
"Defendant DoorDash has engaged in unlawful and deceptive acts, practices and misconduct by misleading Plaintiff and the consuming public to believe that the tip amount entered on the DoorDash app would be received as a tip by the DoorDash delivery workers for their service," the lawsuit claims. "DoorDash knew, and failed to disclose, that the tip amount entered by Plaintiff and other consumers on the app was received by DoorDash, in whole or in part, and used to subsidize its cost of doing business."
DoorDash drivers are paid a specific amount per completed delivery. (The company skirts state and federal minimum wage laws by classifying its delivery personnel as contractors, rather than employees.) As The New York Times detailed earlier this month:
[I]f DoorDash guaranteed a worker $7 for a delivery and a customer did not tip, DoorDash would directly pay the worker $7. If the customer tipped $3 via the app, DoorDash would directly pay the worker only $4, then add on the $3 tip so that the worker would still get only $7.
The class action lawsuit claims customers never would've agreed to such a system, had they known where their tips were going. "Had Plaintiff known that the exact tip entered on the DoorDash app was not being received by the Dasher as a wage enhancement for good service," it contends, "and instead was being paid, in whole or in part, to DoorDash to offset its labor costs, Plaintiff would not have agreed to enter and pay a tip amount on the DoorDash app."
For consumers wary of having tips intended for delivery persons hijacked by a "mutlibillion dollar venture-backed startup," the easy solution is to tip in cash. (As a legal information website, we'll leave it to you to figure out why tipping in cash has other benefits for folks in the service industry.) But for those who already tried to tip their drivers through DoorDash's app, they want their money back.
The class action was filed on behalf of "[a]ll consumers who used DoorDash and paid a tip through the Door Dash app" before the company agreed to alter their tipping structure this month. The lawsuit claims violations of state commercial practices laws, fraud, and unjust enrichment, and is seeking both compensatory and punitive damages.