Excerpt
DoorDash was held liable for deceiving consumers by falsely portraying the impact of their tips on Dasher pay and encouraging tips under false pretenses.
Our analysis
Between approximately 2017 and 2019, DoorDash engaged in unlawful trade practices, specifically violating the Consumer Protection Procedures Act (CPPA), including D.C. Code § 28-3904(f), (f-1), and (e).
- DoorDash's deceptive design revolved around its tipping practices on its online website. It misled consumers by providing false information about how their tips were distributed to delivery personnel, creating a misleading impression that tips significantly impacted Dasher pay. Concurrently, important facts were omitted, leaving consumers uninformed that their tips had little to no influence on Dasher compensation in most cases.
- DoorDash's communication with consumers was often ambiguous, failing to adequately disclose that tips did not significantly affect Dasher pay. Despite encouraging customers to tip, the company's payment scheme effectively reduced its own contributions to employee wages, creating a deceptive practice that ran afoul of the District's consumer protection laws.
Outcome
DoorDash will pay $2.5 million as part of a case resolution. They are now required to ensure that consumer tips go entirely to workers without affecting their base pay. DoorDash must also provide clear, upfront information to consumers about worker compensation and any changes to tipping practices or payment models. This includes itemized charge breakdowns at checkout and detailed payment summaries for workers after each delivery.
Parties
District of Columbia through the Office of the Attorney General and DoorDash
Case number
2019 CA 007626 B
Decision
Related deceptive patterns
Sneaking involves intentionally withholding or obscuring information that is relevant to the user (e.g. additional costs or unwanted consequences), often in order to manipulate them into taking an action they would not otherwise choose.
Related laws
Outlines various unfair or deceptive trade practices, including misrepresenting goods or services, falsely claiming affiliations, quality, or characteristics, and using innuendo to mislead