DoorDash to pay $2.5 million over claims it misled D.C. consumers on driver tips

DoorDash will pay a $2.5 million settlement to several entities in the District of Columbia after allegations it it misled consumers on how tips contributed to worker pay, the Attorney General's office announced Tuesday.

Attorney General Karl A. Racine sued the food delivery service in 2019, claiming the company led consumers to believe that any tips would increase worker pay, but instead used the money as extra profit for the company.

DoorDash will pay $1.5 million in relief to delivery workers, pay $750,000 to the District, and donate $250,000 to two District charities as part of the settlement.

The company will also be required to maintain a payment model that ensures all tips go to workers without lowering their base pay.

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DoorDash will also be required to provide clear and accessible information about its policies and payment model to workers and consumers.

“Today’s settlement rights a wrong that deceived D.C. consumers and deprived workers of monies that they should have been paid,” said Racine. “Gig economy companies provide important and necessary services, especially during the pandemic."

The company told CBS it was "pleased to have this issue behind us, and thank the Office of the Attorney General for D.C. for its work throughout this process. Our focus is on continuing to support Dashers, restaurants and customers in DC and around the country."

Follow Coral Murphy on Twitter @CoralMerfi

This article originally appeared on USA TODAY: DoorDash settles $2.5M lawsuit in DC over claims about driver tips