The attorney general of Washington, D.C. has just delivered a lawsuit to DoorDash, alleging that the popular food-delivery company skimmed tips from its drivers and misled customers into thinking that their gratuities would end up in drivers’ pockets.
In the complaint filed Tuesday, D.C. Attorney General Karl Racine alleges that DoorDash engaged in “deceptive” practices when it came to the tips the company’s drivers received. The city is looking to recover “millions” of dollars from a period of two years before DoorDash pledged to change its policy.
The suit represents the latest tip-related embarrassment for the San Francisco-based company.
It was recently slapped with a class action lawsuit in New York by individuals who claim that the company failed to make it clear that their gratuities were not being allocated as intended.
DoorDash is also facing accusations that despite promises, the company hasn’t changed its tipping policy. Some drivers recently alleged to Recode that DoorDash is still pocketing tips even though CEO Tony Xu promised to institute changes.
The new lawsuit in Washington, D.C. comes after Racine conducted an investigation finding that DoorDash applied tips to the base compensation paid to its “dashers,” or drivers.
“DoorDash used consumer tips to subsidize the Guaranteed Amount payment it promised to Dashers,” the lawsuit alleges.
“Consumers using DoorDash were unlikely to know about or fully understand this payment model. While DoorDash did address the payment model in a separate FAQ webpage, its statements about the model were ambiguous, confusing, and misleading.”
As such, DoorDash has violated the Consumer Protection Procedures Act, according to the lawsuit.
The city is asking for a court order to compel DoorDash to fork over the tips to its workers, as well as to pay civil penalties.
DoorDash has denied the allegations in the suit in a statement to the Wall Street Journal: “We believe the assertions made in the complaint are without merit and we look forward to responding to them through the legal process.”
DoorDash is one of a few companies along with Uber and Lyft that has pledged to spend millions of dollars to fight a recently passed California law that would reclassify gig workers as employees.
The new law threatens the business foundations of these companies, which rely on contract drivers who don’t receive benefits or other perks.