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DoorDash Pays ‘Dashers' $16.7 Million Following NY Tip Investigation
DASHDoorDash(DASH) PYMNTS.com·2025-02-25 11:59

Core Points - DoorDash will pay a 16.7millionsettlementduetomisleadingtippingpracticesbetween2017and2019[1][2]−TheNewYorkAttorneyGeneral′sofficefoundthatDoorDashusedcustomertipstosubsidizethewagesofdeliveryworkers,knownas"Dashers,"ratherthanprovidingthemwiththefulltipsearned[1][3][4]−ThesettlementaimstoreturnmillionstoDashersandensuretransparencyinDoorDash′spaymentpracticesmovingforward[2]CompanyPractices−BetweenMay2017andSeptember2019,DoorDashemployedaguaranteedpaymodelthatallowedDasherstoseetheirpaybeforeacceptingdeliveries[3]−Underthismodel,tipswereusedtooffsetthebasepaypromisedtoDashers,meaningtheyonlysawtipsiftheyexceededtheguaranteedamount[4]−DoorDashguaranteedaminimumpaymentof16.7 million settlement due to misleading tipping practices between 2017 and 2019 [1][2] - The New York Attorney General's office found that DoorDash used customer tips to subsidize the wages of delivery workers, known as "Dashers," rather than providing them with the full tips earned [1][3][4] - The settlement aims to return millions to Dashers and ensure transparency in DoorDash's payment practices moving forward [2] Company Practices - Between May 2017 and September 2019, DoorDash employed a guaranteed pay model that allowed Dashers to see their pay before accepting deliveries [3] - Under this model, tips were used to offset the base pay promised to Dashers, meaning they only saw tips if they exceeded the guaranteed amount [4] - DoorDash guaranteed a minimum payment of 1 to Dashers, using customer tips to cover the rest of the guaranteed pay [4] Industry Context - Research indicates that consumers are becoming more cautious about tipping, with 29% feeling that tipping has become excessive [5][6] - The settlement follows a lawsuit from Uber, which accuses DoorDash of coercing restaurants into exclusive partnerships, a claim DoorDash denies [6]