Gizmodo reports that delivery service DoorDash’s practice of withholding tips from drivers given through its app has caught up with the company as a new class action lawsuit claims that the delivery service misled customers on how their tips were used. An article in the New York Times outlined earlier this month how DoorDash keeps tips paid to drivers through its app:
DoorDash offers a guaranteed minimum for each job. For my first order, the guarantee was $6.85 and the customer, a woman in Boerum Hill who answered the door in a colorful bathrobe, tipped $3.00 via the app. But I still received only $6.85.
Here’s how it works: If the woman in the bathrobe had tipped zero, DoorDash would have paid me the whole $6.85. Because she tipped $3.00, DoorDash kicked in only $3.85. She was saving DoorDash $3.00, not tipping me.
A class action lawsuit has now been filed in the U.S. District Court for the Eastern District of New York on behalf of Alan Arkin, a Brooklyn resident alongside “others similarly situated.” The lawsuit alleges that DoorDash failed to make it clear to customers that tips they gave delivery drivers through the DoorDash app were not being allocated as they were intended and had customers been aware, they would not have used the app to tip drivers.
“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 filing states. “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.”
Through DoorDash’s delivery system, the company can pay as little as $1 per delivery to drivers depending on the amount that a customer tips on the order, this promises a guaranteed earning for the company. Following the Times article, DoorDash CEO Tony Xu announced an overhaul of the company’s pay model stating that “the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days.”
One of the three lawyers representing the plaintiffs, Cory Zajdel, explained that the lawsuit is seeking reimbursement for tips customers assumed were given to drivers on top of the delivery fee. “DoorDash financed its growth by taking tips paid by its users and meant for hard-working delivery workers. Mr. Arkin and all other class members that used DoorDash should recover, at a minimum, all tips that were never paid to the delivery workers,” Zajdel said.
The suit is seeking a trial by jury, Breitbart News will continue to follow the case closely.