DoorDash to pay $16.75M to settle New York probe into deceptive pay practices

New York Attorney General Letitia James announced a settlement with DoorDash (DASH), under which the company has agreed to pay $16.75M to resolve an investigation that examined the company’s alleged violations of New York executive law and general business law. According to an Assurance of Discontinuance, the investigation covered DoorDash’s practices that were in place from approximately May 2017 through September 2019. In particular, the investigation focused on concerns regarding whether DoorDash misled both consumers of DoorDash, who used its app to order the delivery of food, and the delivery workers who delivered the orders, concerning how DoorDash used tips that consumers designated for the delivery workers. Rather than the tip being provided to these delivery workers on top of the guaranteed pay offered to a delivery worker before accepting a delivery, the “tip” typically subsidized guaranteed pay offered and was not provided to the delivery workers on top of the guaranteed pay amount.