Abdelrahman
In the early stages of the food delivery app boom, DoorDash implemented a controversial method for handling customer tips intended for delivery workers. This approach involved retaining a portion of the tips for itself, affecting worker earnings.
This method, which persisted for over two years, sparked significant backlash and scrutiny. In 2019, due to increasing pressure, DoorDash decided to end the practice. However, many Dashers—what the company calls its delivery personnel—found themselves missing out on the earnings that had been withheld from them during that period.
Recently, the New York Attorney General’s office revealed that DoorDash would compensate Dashers with a total of $16.8 million in restitution. This amount is set to benefit approximately 63,000 workers, with most receiving amounts in the low thousands, while some may get up to $14,000, as stated by a representative for Attorney General Letitia James.
DoorDash has previously settled similar claims, including a $2.5 million agreement in Washington, D.C., in 2020, and an $11.25 million settlement in Illinois last year.
To illustrate the earlier system: if DoorDash guaranteed a delivery worker $7 and the customer did not provide a tip, the worker received the full $7 from DoorDash. However, if a customer tipped $3, the company would only pay the worker $4, ensuring the total payout remained $7—including the tip. This practice was kept hidden from customers, with the details buried in fine print within online documents, preventing them from knowing that their tips were actually being used to lessen DoorDash’s own expenses.
