New York’s Attorney General Forces Doordash to Pay Workers for Stolen Tips
According to Andy Newman, writing last February in The New York Times, in the earlier years of Doordash, the company encouraged customers to tip and assured them, “Dashers will always receive 100 percent of the tip.” For two years, Doordash guaranteed its delivery people (“Dashers”) $7/delivery. But if a customer tipped $3, the company would still pay the Dasher $7 and keep the tip for itself. It’s so petty and cruel, it’s hard to imagine the mindset that hatched this plot.
Mr. Newman first reported on the practice back in 2019 when Doordash discontinued it in the face of wholly understandable customer outrage. At the time, Doordash had a market valuation of $7.1 billion. Stealing $3 tips from the workers at the core of its business model is just disgusting. Instacart, Mr. Newman reported, had a similar policy.
In February, Doordash settled with New York’s Attorney General’s office and agreed to distribute $16.8 million to 63,000 workers, some of whom could received as much as $14,000. This follows similar settlements in Illinois and Washington D.C. Doordash was non-committal when asked if it would enter into voluntary settlements in other states.
I wish I used Doordash so that I could stop using Doordash. Punitive damages seem appropriate here. I’m not outraged only on behalf of the employees from whom a multi-billion dollar business stole tips. I would be outraged as a customer to know that tip money I wanted to give to a delivery person when to a multi-billion dollar business instead. In addition to thinking that the money should be transferred from the business to the workers, I also want restitution. Doordash has had that money to play with for six or eight years. New York’s Attorney General’s office estimates that New Yorkers placed over 11 million orders while the policy was in effect. Unless New Yorkers are very skimpy tippers, and I don’t believe that they are, $16.8 million is a very low estimate of the amount of money the company misappropriated.
And it’s not as if there is a simple solution, like just use UberEats. As discussed here, one order from UberEats may subject you to their terms of service with respect to all related companies indefinitely.