The Illinois Attorney General announced an $11.25 million settlement with DoorDash over violations of the Consumer Fraud and Deceptive Business Practices Act. The case, filed in November 2024, stemmed from allegations regarding how the company handled customer tips for delivery drivers.
Dashers who submitted a claim for the settlement can expect their payout soon, as the deadline for claim form submissions passed on February 10, 2025. Read on for key details, including eligibility, payment amounts, and how the settlement impacts DoorDash’s policies moving forward.
Why Was DoorDash Sued?
The Illinois Attorney General’s Office sued DoorDash in November 2024, alleging that between July 2017 and September 2019, the company misled customers about how driver tips were distributed. The lawsuit claimed that:
- Customers believed their tips would increase driver earnings, but instead, DoorDash allegedly used the tips to fulfill its Pay Guarantee Model.
- In this model, DoorDash contributed as little as $1 to a driver’s pay, making up the difference with customer tips rather than paying them directly to drivers.
- As a result, drivers did not receive additional income from customer tips beyond their guaranteed minimum.
Although DoorDash ended this practice in 2019, the lawsuit sought relief for affected dashers who delivered under the Pay Guarantee Model during the specified period.
Who Qualifies for a Payout?
The following groups are eligible for a payout under the DoorDash class action settlement:
- Dashers who completed deliveries in Illinois between July 2017 and September 2019.
- Dashers who received customer tips during this period, which DoorDash used to fulfill their guaranteed minimum earnings.
- Those who submitted a valid claim form before the deadline of February 10, 2025.
- Dashers who did not opt out or object to the settlement.
When Will the Payments Be Issued?
Eligible claimants can expect payments after March 4, 2025. The settlement administrator will process payments within 90 days of the settlement’s effective date.
How Much Will Dashers Receive?
Payout amounts will be determined based on the total claims and the amount available after deductions for administration costs, taxes, and other expenses. The calculation follows this formula:
$2 + Dasher Percentage (Settlement Amount – Administration Costs – $2 per claimant)
The minimum payment per eligible claimant is $2, but individual amounts will vary based on factors such as the number of deliveries completed and tips received during the affected period.
What Other Changes Will DoorDash Implement?
In addition to financial compensation, DoorDash has agreed to several policy changes, including:
- Ensuring that customer tips directly benefit dashers and do not offset DoorDash’s base contribution to driver pay.
- Providing clear disclosures about the payment model for both dashers and consumers.
- Displaying estimated pay, delivery distance, and breakdowns of earnings, including base pay, tips, and additional compensation.
- Allowing dashers to access their earnings history for at least five months.
- Submitting compliance reports to the Illinois Attorney General every six months for two years.
How Will Dashers Receive Their Payments?
Claimants who filed valid claims will receive their payout through the payment method selected in their claim form. Options include:
- ACH transfer (direct deposit)
- Prepaid card (digital or physical)
- Physical check
Dashers who opted for a physical check and have changed their mailing address should update their information with the settlement administrator to avoid payment delays.
FAQs
1. What was the main issue in the DoorDash lawsuit?
DoorDash was accused of misleading customers by using their tips to fulfill a guaranteed minimum pay instead of adding the tips on top of base earnings.
2. Can I still file a claim for the settlement?
No, the deadline to submit a claim was February 10, 2025. If you missed the deadline, you will not be eligible for a payout.
3. When will I receive my payment?
Payments are expected to begin processing after March 4, 2025, and will be completed within 90 days of the settlement’s effective date.
4. How will I get my money?
Payments will be sent via ACH transfer, prepaid card, or physical check, depending on the option you selected in your claim form.
5. Will this lawsuit change how DoorDash pays its drivers?
Yes, as part of the settlement, DoorDash has agreed to maintain a transparent pay model where customer tips are directly passed on to dashers.
6. What if I moved after submitting my claim?
If you opted for a physical check and have changed your address, contact the settlement administrator to update your mailing details.
If you are an eligible dasher, keep an eye on your email or bank account for updates regarding your payout. This settlement marks an important step toward greater transparency in gig economy pay practices .