DoorDash is facing a new mood regarding its tipping methods. This time it comes from Washington D.C. General Manager Karl Racine. In the suit, Racine accuses DoorDash of engaging in fraudulent tipping procedures while failing to provide relief to workers whose tips were taken.
Racine's office first opened an investigation into DoorDash's practice in March 2019. In DC, the suit states DoorDash customers paid millions of dollars in tips that the company used to offset the cost of its payments to workers for two years. Racine's office is trying to get DoorDash to pay damages and reimbursement.
"We strongly agree and are disappointed with the measures taken today," a spokesman for DoorDash told TechCrunch in an email. “Transparency is of utmost importance, which is why we publicly revealed how our previous salary model worked in communications created specifically for Dashers, consumers and the public from 201
The suit focuses on how DoorDash had offset the amount it pays its suppliers with customer tips. DoorDash's payment structure is as follows: $ 1 plus customer tips plus salary increase, which varies depending on order complexity, distance to restaurants and other factors. It is only when a customer fails at all, as DoorDash told Fast Company, about 15 percent of the time, that DoorDash is on the hook to pay the full amount guaranteed.
In July, DoorDash announced that it would change its tipping model, about a month after it doubled on the same model. In August, DoorDash revealed how the new model would work, but it later made it clear that it would not pay back any workers for lost wages.
"There is no" back pay "in question here because every cent of every tip on DoorDash has always gone and will always go to Dashers," a spokesperson from DoorDash previously told TechCrunch via email in response to a ask whether DoorDash would pay back its delivery workers or not.
When Instacart changed its tipping method earlier this year, retroactively compensated buyers when tips were included in the minimum payment, however, DoorDash did not see the need for repayment.
Meanwhile, DoorDash is funding a voting initiative with Uber and Lyft to try to ensure that it does not have to treat its workers as W-2 employees.
The vote appears to carry an income guarantee of at least 120% of the minimum wage on the job , 30 cents per mile for expenses, a health insurance contract, occupational accident insurance for occupational injuries, protection against di discrimination and sexual harassment and car accidents and liability insurance.
This initiative is a direct response to the legalization of AB-5, the player bill which makes it more difficult for people like Uber, Lyft, DoorDash and other players with gig economy to classify their workers as 1099 independent contractors.
I have contacted DoorDash and will update this story if I hear back.