The company appeared to use a "deceptive payment model" that would reduce labor costs, DC said, and effectively subsidized the business without customer knowledge. While DoorDash had since changed its practice, the Attorney General's Office said DoorDash had offered no compensation to either customers or delivery workers in the months since.
The lawsuit officially accuses DoorDash of violating DC's Consumer Protection Procedures Act and is seeking both damages and damages.
Not surprisingly, DoorDash will contest the lawsuit. In a statement to Engadget, it said it was "disappointed" with the lawsuit, claiming it released its payroll model in 201[ads1]7. It also independently stated that it "paid 100% of Dashers tips," even though the lawsuit specifically dismantles this claim. – the problem is not that tips did not go to couriers, it is that they were used as a substitute for salaries rather than supplements. You can read the full statement below.
Whatever the outcome, it is an important moment. DC's Attorney General believes this is the first time a US Attorney General's Office has taken hold of DoorDash. The lawsuit may be an example for other attorneys who intend to take similar action. It can also serve as a warning to other concentration companies that have used (or are using) similar methods to cut costs.
"We strongly disagree with and are disappointed with the action taken today. Openness is of paramount importance, which is why we published how our previous pay model worked in communications specifically created for Dashers, consumers and the general public from 2017. We have also partnered with an independent third party to confirm that we have always paid 100% of Dashers' tips. We believe the allegations in the complaint are unprecedented and look forward to answering them through the legal process. "