CHICAGO (WAND) - Attorney General Kwame Raoul announced a $11.25 million settlement agreement with DoorDash Monday.
If approved by a judge, the settlement will resolve allegations that the company violated the Illinois Consumer Fraud and Deceptive Business Practices Act by misrepresenting to customers that tipping would increase drivers’ pay.
“DoorDash encouraged customers to tip as much as possible, indicating that all of their tip would go to workers,” Raoul said. “Instead, DoorDash used tips to reduce the amount the company paid workers. By putting tips toward driver pay, DoorDash could get away with contributing as little as $1 toward a worker’s pay and allow tips to make up the rest. This settlement ensures tips from customers end up where they were intended to go: into the pockets of delivery drivers.”
Raoul’s office said that instead of allowing drivers to keep their tips on top of whatever DoorDash would pay them, DoorDash used the customer tips toward a guaranteed pay that DoorDash promised delivery drivers. They said customer tips rarely had an impact on a driver’s pay beyond reducing DoorDash’s contribution to their guaranteed pay.
DoorDash ended the practice in 2019.
The proposed settlement includes relief for over 79,000 workers who made deliveries in Illinois while the policy was in place between July 2017 and September 2019.
The settlement requires DoorDash to maintain a pay model that does not use consumer tips as a factor when calculating its own contributions to workers’ pay. It also requires the company to make clear disclosures to both workers and customers.
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