IN
THE
SUPERIOR
COURT
OF
THE
DISTRICT
OF
COLUMBIA
Civil Division
DISTRICT OF COLUMBIA
a municipal corporation
441
4th Street, N.W.
Washington, D.C. 20001,
Plaintiff,
v.
DOORDASH, INC.
901
Market Street
San Francisco, CA 94103
Serve
on:
REGISTERED
AGENT
SOLUTIONS, INC.,
Registered Agent
1100 H Street N.W.
Suite 840
Washington, D.C. 20005
Defendant.
Case No.:
COMPLAINT FOR VIOLATIONS OF
THE
CONSUMER
PROTECTION
PROCEDURES
ACT
Plaintiff the District
of
Columbia ("District"), through the Office
of
the Attorney General,
brings this action against Defendant DoorDash, Inc. ("DoorDash") for violations
of
the District's
Consumer Protection Procedures Act ("CPPA"), D.C.
Code§
28-3901, et seq.
In
support
of
its
claims, the District states as follows:
INTRODUCTION
1.
This case seeks relief from Door Dash' s deceptive trade practices that were
in
place from approximately July 2017 until at least September 2019 (the "relevant time period").
DoorDash misled consumers to believe that they were using DoorDash's online delivery service
to tip the company's workers who delivered their food. Instead, the "tip" largely went to
subsidize DoorDash's agreed payment to the worker and almost never served to increase that
payment amount.
2. DoorDash is a food delivery company valued at nearly $13 billion. DoorDash is
an online platform whose business involves connecting consumers (who place food delivery
orders) with workers (who deliver food to the consumers). DoorDash maintains a consumer and
worker base in Washington, D.C. ("D.C.") numbering well into the tens
of
thousands. DoorDash
calls its delivery
workers-all
of
whom it classifies as independent contractors-"Dashers."
3. Consumers place delivery orders through DoorDash's mobile application
or
website (www.doordash.com). After the consumer places their order, the consumer enters a
"checkout screenflow," where they receive an order subtotal, as well as the option to tip the
Dasher who will perform the delivery. The consumer is presented with a menu
of
discrete tip
amounts, as well as an option to enter a customized tip. While the tip options presented vary
depending on the size
of
the order, a default tip amount is preselected. After confirming their tip
selection, the consumer places their order.
4. Upon receiving a consumer order, DoorDash presents it to a nearby Dasher
through the DoorDash mobile application, along with an approximate delivery route and a
limited time to accept
or
decline the job. During the relevant time period, DoorDash also
provided the Dasher with a "Guaranteed Amount," which was shown to the Dasher before they
accepted or declined the job. The Guaranteed Amount was set by DoorDash and informed the
Dasher the minimum amount they would earn
if
they accepted the job.
If
the Dasher accepted
and successfully completed the delivery, they were paid at least the Guaranteed Amount.
If
the
Dasher declined the delivery, it would be offered to other Dashers until it was accepted.
2
5.
Any
reasonable consumer would have expected that the ''tip" they added to the
delivery charge through the DoorDash checkout screenflow would be provided to the Dasher on
top
of
the payment promised
by
DoorDash for the delivery.
But
during the relevant time period,
that was not the case. Instead, DoorDash used consumer tips to subsidize the Guaranteed
Amount payment it promised to Dashers.
6. During the relevant time period, DoorDash's payment model for all orders was
that it would pay
$1
plus the remainder
of
the Guaranteed Amount not covered
by
the
consumer's tip. Take, for example, a
job
where DoorDash set the Guaranteed Amount at $10.
If
a consumer tipped $0, DoorDash would pay $10 ($1 + $9 remainder).
If
a consumer tipped $9,
DoorDash would pay
$1
($1 + $0 remainder). Thus, no matter where the tip was between $0 and
$9, the Dasher would be paid the same
($10)-the
only thing the consumer's tip changed was
DoorDash's share
of
the
worker's
pay. Indeed, in the overwhelming majority
of
circumstances,
the consumer's tip had no impact
on
the Dasher's actual payment.
7. Consumers using
Door
Dash were unlikely to know about
or
fully understand this
payment model. While DoorDash did address the payment model in a separate FAQ webpage, its
statements about the model were ambiguous, confusing, and misleading. Among other things, the
FAQ
webpage encouraged consumers to tip, but did not disclose that a consumer's tip would, in
the vast majority
of
circumstances, make no difference at all to a
Dasher's
pay. In addition, the
FAQ webpage was entirely separate and apart from the consumer's checkout screenflow. As a
result, a consumer placing an order would likely never encounter the FAQ.
8. On August 22, 2019, following exposure
of
this practice
by
multiple media
outlets, DoorDash announced that it would change its tipping practices.
See DoorDash Blog Post,
Working
to
Strike a Better Balance, (Aug. 22, 2019), available at
3
https ://blog.doordash.com/working-to-strike-a-better-balance-e 1f66c76fca
1.
However,
DoorDash did not provide any restitution for consumers who had been misled by DoorDash's
deceptive tipping practices. Nor did it provide any relief to workers who had their tips taken by
DoorDash to subsidize its business.
9.
The District brings this case to permanently enjoin this deceptive trade practice
and secure appropriate restitution and other relief.
JURISDICTION
10. This Court has jurisdiction over the subject matter
of
this case pursuant to D.C.
Code§§
11-921 and 28-3909.
11. This Court has personal jurisdiction over Defendant DoorDash pursuant to D.C.
Code § l 3-423(a).
PARTIES
12. Plaintiff the District
of
Columbia, a municipal corporation empowered to sue and
be sued, is the local government for the territory constituting the seat
of
the government for the
United States. The District brings this action through its chief legal officer, the Attorney General
for the District
of
Columbia. The Attorney General has general charge and conduct
of
all legal
business
of
the District and all suits initiated by and against the District and
is
responsible for
upholding the public interest. D.C.
Code§
l-30I.8l(a)(l).
The Attorney General is specifically
authorized to enforce the District's consumer protection laws, including the CPPA.
13. Defendant DoorDash, Inc. is a Delaware corporation with its headquarters and
principal place
of
business at
901
Market Street, San Francisco, CA 94103. DoorDash provides
food delivery services to consumers in Washington, D.
C.
4
FACTS
A. DoorDash's Business
in
Washington, D.C.
14.
DoorDash
is
an on-demand food delivery company. DoorDash works by
matching two types
of
users with one another: (1) consumers (who pay DoorDash to place
delivery orders) and (2) workers (who DoorDash pays to deliver those orders).
15.
In
order to use Door Dash' s services, consumers register for a DoorDash account
by providing the company with their name, email address, and phone number. Once a consumer
is logged into their account, they can place a delivery order with numerous local restaurants
through DoorDash's website and mobile application.
16. DoorDash calls its workers "Dashers." A prospective Dasher also registers with
DoorDash by providing their email, phone number, and zip code. After clearing a background
check, Dashers are able to begin delivering orders for the company. DoorDash classifies its
Dashers as independent contractors and pays them on a weekly basis.
17. DoorDash has operated in D.C. since 2015. The company currently maintains a
consumer and Dasher base operating in D.C. that numbers well into the tens
of
thousands. On a
weekly basis, DoorDash receives thousands
of
delivery orders in D.C.
B. Door Dash 's Dasher Payment Model During the Relevant Time Period
18. Throughout the relevant time period, DoorDash employed a payment model that
subsidized the company's payments to Dashers with consumer tips.
5
19. Under this model, a consumer first placed a delivery order. This process involved
a two-screen checkout screenflow. First, DoorDash presented the consumer with a subtotal for
the order that included the cost
of
food, as well as taxes and a service fee, and an option to
"Continue." After clicking "Continue," DoorDash presented the consumer with a "Delivery
Details" page that allowed the consumer to confirm the delivery address and estimated time
of
arrival, and also included an option to add a "Dasher Tip." An example
of
how this two-screen
checkout screenflow appeared to consumers on DoorDash's mobile application
is
provided
below.
10:01-1
Back
Jack
in
the
Box
You
soved
$4.89
with
DashPa,s
Bacon, Egg & Cheese Biscuit
(Entree)
2 Supreme Croissant (Combo)
L:.irgc Hot C o
if
cc, H.1'.:. 11
Ur
ov
m
Add
more
item
s
Promo
code
Subtotal
Tax and Fees
Delivery
$3
09
$1194
$15.03
$2
03
Free
Continue
$17.06
10:02-f
<
My
Cart
Checkout
,di'?=-
·
DELIVERY
DETAILS
) E
fl
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I N
µm
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orr
S111,
, Q
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9,ur.n~
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ll
Go gle
Address
901
Market
Street
>
Delivery Instructions
Add
>
ETA
ASAP
(57
-
67mins)
>
PAYMENT
Dasher Tip
<D
$400
$3
@i
··
$5
Other
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Payment
MasterCard
.
..
6140
>
Place
Order
$21
06
20. The options presented for the Dasher Tip varied depending on the size
of
the
order. However, in general, the consumer was provided with several discrete options either
in
6
dollars (i.e., $3, $4, $5) or as a percentage
of
the total amount (i.e., 10%, 15%, 20%). Consumers
were also provided with an "Other" option to enter a customized tip amount. DoorDash defaulted
the tip to the middle amount.
21.
If
a consumer selected the "information" icon next to the "Dasher Tip," a pop-up
window appeared informing the consumer that, "Tip is [selected amount] on your [total amount]
order (subtotal & service fee). All
of
your tip goes to your dasher." (emphasis added).
22. A consumer confirmed their order
by
clicking the "Place Order" button.
23. Next, DoorDash matched the placed order with a Dasher by presenting a nearby
Dasher with an offer to deliver the order. This offer was presented to the Dasher through the
DoorDash application and included a map showing the delivery route and distance, a time to
complete the delivery, a summary
of
the items to be delivered, and a "Guaranteed Amount"
dollar amount for completing the delivery. The Dasher had a limited time in which to accept or
decline the offer.
24. The "Guaranteed Amount" provided the Dasher with the minimum amount they
would earn for making the delivery. DoorDash calculated the Guaranteed Amount using a
variety
of
factors, including the size
of
the order, the projected delivery distance, and the
projected wait time at the restaurant.
25. Under DoorDash's payment model, DoorDash paid out (a)
$1
and (b) any
remainder toward the Guaranteed Amount after deducting the consumer's tip. DoorDash's share
of
the Dasher's Guaranteed Amount thus fluctuated depending on the consumer tip.
7
26. Take, for example, a Dasher who accepted a job with a Guaranteed Amount
of
$10:
a.
If
a consumer tipped $0, DoorDash would pay $10
($1
+ $9 remainder).
The Dasher was paid $10.
b.
If
a consumer tipped $3, DoorDash would pay $7
($1
+ $6 remainder).
The Dasher was paid $10.
c.
If
a consumer tipped $6, DoorDash would pay $4
($1
+
$3
remainder).
The Dasher was paid $10.
d.
If
a consumer tipped $9, DoorDash would pay
$1
($1
+ $0 remainder).
The Dasher was paid $10.
e.
If
a consumer tipped $10, DoorDash would pay
$1
($1
+ $0 remainder).
The Dasher was paid $11.
27. Thus, for the vast majority
of
orders, the consumer's tip made no difference at all
to the Dasher's pay. As seen
in
the prior example involving a $10 Guaranteed Amount, any tip
amount a consumer chose between $0 and $9 would not affect the Dasher's
pay-for
any tip
amount in that range, the Dasher would be paid $10. Only when the consumer chose to tip over
$9
would the Dasher's pay increase above $10.
28. Put another way, DoorDash set the Dasher's pay for each job (the Guaranteed
Amount) and then used the consumer's tip, which DoorDash defaulted to a set amount, to
subsidize the company's share
of
that pay.
29. This practice was deceptive, as any reasonable consumer would have expected
that the amount they chose to tip would increase a worker's pay and be provided to workers on
top ofDoorDash's promised payment.
8
30. This deception was compounded by how DoorDash presented tip options to
consumers. As shown in the below screenshot excerpted from the checkout screenflow shown in
Paragraph
19,
by presenting tip options to consumers in an increasing sequence ($3, $4, and $5),
a reasonable consumer would have expected that selecting a higher tip amount would increase
the payment to Dashers. But,
in
the vast majority
of
orders, regardless
of
the tip chosen by the
consumer from the options presented by DoorDash, the Dasher received the same payment
amount. In other words, regardless
of
whether a consumer tipped $3, $4, or
$5
in
the example
below, the worker's payment in almost all cases did not change. The only beneficiary
of
higher
tips in these circumstances was
DoorDash-the
more the consumer tipped, the less DoorDash
had to pay to its Dashers.
PAYMENT
$4.00
$3
Other
31. While DoorDash made some disclosures during the relevant time period about its
payment model to consumers
in
an FAQ webpage, they were ambiguous, confusing, and
misleading. For example, DoorDash addressed its payment model on a webpage titled, "Should I
tip my Dasher?"
In
responding to that question, DoorDash disclosed the following to consumers:
In
general, we recommend you tip your Dasher and Dashers always
receive 100%
of
tips.
Dashers are independent contractors who work hard to provide you
with a great delivery experience. We encourage you to tip an amount
that you believe
is
fair to thank your Dasher. Standard tipping ranges
are similar to those
of
the broader service industry. We provide a
su·ggested tip amount, though you're welcome to adjust the
percentage or specify the exact dollar amount you'd like to leave for
your Dasher.
9
Here's how Dasher pay is calculated. Dashers are shown a
guaranteed amount that they will earn when they are offered a
delivery. In addition to 100%
of
the tip, Dashers will always receive
at least
$1
from DoorDash. Where the sum of$1 plus tip
is
less than
the guaranteed amount, DoorDash will provide a pay boost to make
sure the Dasher receives the guaranteed amount. Where that sum is
more than the guaranteed amount, the Dasher keeps the extra
amount.
Tips can be entered on the checkout page prior to completing your
order.
If
you'd like to adjust your tip after you place your order,
please visit the Delivery Help section and we'll adjust the tip for
you.
32. This FAQ was ambiguous, confusing, and misleading because it encouraged
consumers to tip, but did not disclose that a consumer's tip would,
in
the vast majority
of
circumstances, make no difference at all to a Dasher's pay and would only go toward subsidizing
DoorDash's share
of
Dasher pay.
In
addition, DoorDash's representations to consumers that
Dashers would receive "100%
of
the [consumer's] tip" was also misleading because it
contravened a reasonable consumer's understanding that a tip would be provided on top
of
DoorDash's payment to the Dasher and it implied to consumers that their choice
of
tip would
affect Dasher pay when in reality, this was rarely the case.
33. In addition, this FAQ disclosure was located on a webpage that consumers would
be unlikely to see, entirely separate from the checkout screentlow that consumers used to place
their orders.
It
was thus insufficiently clear and conspicuous, especially when considering how
DoorDash's payment model contravened a reasonable consumer's expectations that tips would
be provided to the Dasher on top
of
the payment promised by DoorDash and that generally, an
increased tip would increase a Dasher's pay.
34. In effect, DoorDash's deceptive payment model allowed it to significantly reduce
its labor costs by using consumer tips (which DoorDash defaulted to a positive value) to
subsidize the company's share
of
the Guaranteed Amount.
10
35. These cost savings were significant. Over the course
of
the two-year relevant time
period DoorDash had this policy in place, consumers in D.C. paid millions
of
dollars in tips that
were used to subsidize DoorDash's payments to Dashers.
36. Had DoorDash adequately disclosed its payment model to consumers and the fact
that tip amounts would rarely have an impact on Dasher pay, this understanding would have
significantly affected consumers' tipping decisions.
C.
Door Dash 's Changes to its Tipping Practices
37. The Office
of
the Attorney General opened an investigation ofDoorDash's
tipping practices in March 2019. Five months later, after multiple media outlets published reports
exposing DoorDash's tipping practices, DoorDash announced changes to its tipping practices on
August 22, 2019. Those changes were implemented in September 2019. However, Door Dash has
not provide any restitution to consumers who were misled by DoorDash's deceptive tipping
practices throughout the relevant time period. Nor has DoorDash committed to making workers
whole who had their tips taken
by
DoorDash to subsidize its payments to Dashers.
Count
I:
Violations
of
the Consumer Protection Procedures Act
38. The District incorporates the allegations
of
paragraphs 1 through 37 into this
Count.
39. The CPPA is a remedial statute that
is
to be broadly construed. It establishes an
enforceable right to truthful information from merchants about consumer goods and services that
are or would be purchased, leased, or received in the District
of
Columbia.
40. The services that DoorDash provides consumers are for personal, household, or
family purposes and, therefore, are consumer goods and services.
11
41. DoorDash, in the ordinary course
of
business, supplies consumer goods and
services and, therefore,
is
a merchant under the CPP
A.
42. DoorDash users receive consumer goods and services
in
the form
of
food delivery
services from Door Dash and are therefore consumers under the CPP
A.
43. The CPPA prohibits unfair and deceptive trade practices in connection with the
offer, sa]e, and supply
of
consumer goods and services.
44. During the relevant time period, DoorDash's deceptive payment model
constituted a deceptive and unfair trade practice that violated D.C.
Code§
28-3904.
45. During the relevant time period, DoorDash made misrepresentations to consumers
in
their checkout screenflow that consumers could "tip" their Dashers, commonly understood as
an amount paid directly to the worker on top
of
any agreed payment by the emp]oying company,
that "All
of
your [the consumer's] tip goes to your dasher", and that consumer tips would impact
Dasher pay. These misrepresentations had the tendency to mislead and were unfair and deceptive
trade practices
in
violation
ofD.C.
Code§
28-3904(e).
46. During the relevant time period, DoorDash's failure to disclose to consumers that
their tips, in the vast majority
of
cases, did not change Dasher pay and subsidized DoorDash's
share
of
payments to Dashers, was a failure to state material facts that had the tendency to
mislead and were unfair and deceptive trade practices in violation
ofD.C.
Code§
28-3904(f).
47. During the relevant time period, DoorDash's failure to adequately explain to
consumers that their tips would rarely impact Dasher pay, as well
as
its representations, both
express and implied, that 100%
of
tips would go to workers and that consumer tips would impact
Dasher pay, constituted ambiguities as to material facts that had the tendency to mislead and
were unfair and deceptive trade practices in violation
ofD.C.
Code§
28-3904(f-1).
12
Prayer for Relief
WHEREFORE, the District
of
Columbia respectfully requests this Court enter a
judgment in its favor and grant relief against Defendant DoorDash as follows:
(a) Permanently enjoin Defendant, pursuant to D.C. Code § 28-3909(a), from
violating the CPPA;
(b) Award such relief as the Court finds necessary to redress injury resulting from
Defendant's violations
of
the CPPA, including disgorging monies from Defendant based on their
unlawful conduct and/or requiring Defendant to pay damages and restitution;
( c) Award civil penalties in an amount to be proven at trial and as authorized per
violation
of
the CPPA pursuant to D.C.
Code§
28-3909(b); and
(d) Award the District the costs
of
this action and reasonable attorney's fees pursuant
to D.C. Code § 28-3909(b
);
and grant such further
relief
as the Court deems
just
and proper.
Jury
Demand
The District
of
Columbia demands a trial by
jury
by the maximum number
of
jurors
permitted by law.
Dated: November 19, 2019
EN KONOPKA [ 495257]
Deputy Attorney General
Public Advocacy Divisi
R. ROCK [ 493521]
Assistant Deputy Attorney General
Public Advocacy Division
13
BE
Nf
AMJNM.
WISEMAN [1005442]
Di
::;;~
umer
~
~NDOLPH
1.
lm£f [1032644]
. RIMM [1019209]
Assistan Attorney General
441
4th Street, N.
W.
Washington, D.C. 20001
(202) 741-5226 (Phone)
(202) 741-8949 (Fax)
Attorneys
for
the District
of
Columbia
14
