Food delivery is big business.
DoorDash, valued at $13 billion, has a nice piece of that - for now.
But after the members of the media run with this lawsuit, that market share could shrink, along with brand erosion.
BusinessInsider reports that District of Columbia Attorney General Karl Racine has filed a lawsuit against Doordash. Here is a copy of the complaint "District of Columbia v. DoorDash." It is titled "Violation of the Consumer Protection Procedures Act."
Essentially, the AG contends that between July 2017 and September 2019 DoorDash used tips from consumers to subsidize its own balance sheet.
Consumers assumed the tips were going to the delivery drivers.
Instead, the AG claims this: If the amount of revenue from the delivery didn't pay the worker's minimum compensation, then DoorDash applied the tip to that to bring it up to standard. Whatever was left over from the tip DoorDash pocketed.
Two parties were allegedly harmed. Consumers had been fooled about where their tip was going. So much for transparency. The workers didn't receive the tip.
When the policy was uncovered there had been a outcry by constituencies ranging from the press to the individual drivers. The policy was then changed.
Unfortunately, if this lawsuit hurts DoorDash's business what also could be hurt is the ability of their drivers to continue with this work. They will have to hustle to find other sources of income.
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