Amazon, DoorDash, Instacart, and Whole Foods Delivery Tip Fraud
Zimmerman Reed is investigating numerous app-based delivery companies’ deceptive and questionable practices of using voluntary tips from customers to subsidize their own labor costs. Customers already pay substantial service and delivery fees for these app-based services, but are also asked to leave a tip through the app. Many customers believe that by leaving a tip, they are giving the delivery person additional compensation. That isn’t always the case. If you left a tip on one of these apps, please fill out a Free Case Review Form.
As reported by Quartz in July 2019:
DoorDash promises workers, which it calls Dashers, a “guaranteed minimum” payment on each order. It counts customer tips toward that minimum, rather than on top of it. In any of these cases, the outcome for the worker is the same, regardless of whether you tip. As long as your tip counts toward the guaranteed order minimum set by the company, it doesn’t matter to the worker whether you left it or not; they get paid the same. As such, the tip only benefits the company because it reduces what they pay the driver.
Here’s an example: DoorDash promises a driver that they’ll earn a $3 minimum for delivering your order, which the driver accepts. You tip $2 using the DoorDash app. The driver should earn $5, right? Wrong – the driver still earns $3: $1 from DoorDash and your $2 from your tip. This is outrageous conduct that harms both the drivers and the customers. The only winner is the multibillion-dollar delivery company.
