DoorDash Settlement Would Pay a Paltry $130 to Workers Instead of Making Them Employees

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DoorDash is clearing a suite of class-action lawsuits from Massachusetts and California off its plate, just as it marches ahead with extended battles in those states against employee classification. The company’s proposed settlement for claimants in 11 cases results in a predictably lousy payout for workers who’ve been fighting for years for employee classification and a minimum wage; of the $100 million settlement fund, $28 million has been allocated for lawyers, and an estimated $130 for each Dasher who makes a claim.

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“$130 dollars is a complete joke,” a spokesperson for the labor rights campaign Gig Workers Rising told Gizmodo. “Doordash CEO Tony Xu took home $413m last year. They can afford to pay workers way, way more.” Last year, Xu received one of the largest CEO compensation packages of all time. Meanwhile, DoorDash has earmarked approximately $61 million of its settlement for Dashers. DoorDash will allocate $10,000 each to named plaintiffs who filed the suits.

None of the lawyers contacted in those cases have responded to Gizmodo’s request to confirm that the settlement on the site is authentic, and it doesn’t yet appear on the case docket. On Wednesday , DoorDash confirmed to Gizmodo that the linked site is a description of the settlement agreement.

That sum falls scandalously short of the requests Dashers had initially made. The settlement lumps together two ongoing suits, and eight pending ones, under a 2017 case Marko v. DoorDash, Inc., in which three Dashers asked that the court force the company to give Dashers employee status to which they are entitled under California’s labor code. They claimed that they were owed work expenses, overtime pay, and minimum wage, among other forms of compensation.

DoorDash promises that as a result of the settlement, it’ll start giving drivers in California and Massachusetts the entirety of their tips, without DoorDash deducting them from their pay. But the company already supposedly resolved that issue in 2019 and reached a separate $2.5 million settlement with aggrieved drivers last year.

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DoorDash’s decision to settle this bundle of suits is interestingly timed, in the scheme of its joint campaign with Uber and Lyft to permanently shield itself from classifying workers as employees. Doing so would force it to pay minimum wage, unemployment insurance, and potentially reckon with unions. Last year, California passed a law that would do just that, but rather than follow the law, DoorDash, Uber, and Lyft led the charge to overturn the hard-fought policy with their own ballot measure Prop 22.

The companies wrote in provisions making it incredibly difficult for lawmakers to repeal, and they spent over $200 million to deceive the public into believing that it was a workers’ rights measure. A Los Angeles superior court judge found that the ballot measure’s stated purpose was an outright lie, writing that its actual M.O.—squashing collective bargaining, minimum wage requirements, and safety provisions—served “only to protect the economic interests of the network companies in having a divided, ununionized workforce.” The companies have said they plan to appeal the ruling, and DoorDash said in a defiant statement that “Prop 22 remains in full effect.”

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Now in the settlement agreement, DoorDash writes that both sides reached an agreement after “considering the risks and uncertainties of continued litigation.” DoorDash claims that the plaintiffs risk losing their cases if the courts enforce the company’s arbitration agreement, dictating that independent contractors can’t sue. DoorDash doesn’t specify its own risks, but it seems that another judge ruling in favor of allowing those workers to sue, and employee classification, would be on the list.

DoorDash notes in the settlement agreement that it still considers Dashers independent contractors and that the court has not ruled in favor of either side. The judge is set to issue a final decision on November 30th.

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Due to the locations of the suits, you’ll only qualify for the $130-ish payout if you’ve Dashed in Massachusetts between September 26, 2014, through March 31, 2021, or California from August 30, 2016, through December 31, 2020. If that’s you, you can file a claim here.

DoorDash, Grubhub And Uber Eats Sue New York City Over Price Caps

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DoorDash, Grubhub And Uber Eats Sue New York City Over Price Caps

Enlarge this image toggle caption Mark Lennihan/AP Mark Lennihan/AP

Three of the nation’s largest food delivery companies are suing New York City over a limit on fees it put in place during the pandemic to protect restaurants devastated by the forced closure of their dining rooms.

The city has continued to extend those caps even as vaccinations allow more indoor dining which, according to the companies, cost them millions of dollars over the summer.

In the suit filed late Thursday the U.S. District Court for the Southern District of New York, DoorDash, Grubhub and Uber Eats call the fee caps government overreach. The companies say they were “instrumental in keeping restaurants afloat and food industry workers employed” after investing millions of dollars in relief for those businesses.

They are filing for an injunction that would prevent the city from enforcing an extension on the fee caps adopted in August.

The companies are seeking unspecified monetary damages as well as a jury trial.

New York Law Department spokesman Nicholas Paolucci said in an email that the city’s initiative is legally sound and will be defended in court.

The city of New York first enacted the price cap in May 2020 in response to the pandemic, limiting the rate that third-party platforms could charge restaurants at 15% of an online order for delivery services, and 5% for all other services, including marketing.

Last month, New York City Council passed a handful of bills it said would help small restaurants, like prohibiting some third-party delivery service charges and mandating that their phone numbers are listed on those delivery sites.

It also pushed forward an extension on the fee caps that would not expire until at least early next year.

Food delivery services, Grubhub, DoorDash and Uber Eats among them, that experienced explosive growth during the pandemic are increasingly clashing with local governments who say restaurants and consumers are getting hit with exorbitant fees and high costs.

Last month Chicago officials accused DoorDash and Grubhub of harming the city’s restaurants and their customers by charging high fees and through other deceptive practices. Delivery companies have been the target of legal authorities in other cities and states before, but those efforts have targeted specific policies compared to Chicago’s attack on numerous elements of the companies' operations. The companies called Chicago’s lawsuits baseless.

San Francisco’s district attorney has accused delivery companies of violating California law by classifying drivers as contractors. And Washington, D.C., reached a settlement with DoorDash in 2019 after alleging the company misled customers about how much drivers received in tips.

The Massachusetts attorney general’s office in July filed a lawsuit accusing Grubhub of charging restaurants illegally high fees during the pandemic. The state had capped fees for much of 2020.

In the lawsuit filed late Thursday, Grubhub, DoorDash and Uber Eats argue that New York City has continually pushed back the expiration date of the price caps and that now there’s no date at all, making them permanent. They also claim that the law has cost them “hundreds of millions of dollars” through July.

“The ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates,” the lawsuit states.

DoorDash said in a statement on Friday that “price controls can lead to higher prices for consumers, which can reduce orders and earnings for Dashers. Imposing permanent price controls is an unprecedented and dangerous overreach by the government and will limit the options small businesses rely on to compete in an increasingly competitive market.”

Food delivery companies, despite soaring revenues, have delivered mixed economic results even as they were transformed into a critical service during the pandemic.

Orders handled by DoorDash reached unprecedented levels during its most recent quarter and while revenue growth slowed from the height of the pandemic, the company said last month that sales were still up an astounding 83%, to $1.24 billion.

Yet the company lost $102 million. Start-ups have to invest large sums to grow and delivery start-ups say that has grown worse as they are forced to spend more to lure new drivers as infections rise. DoorDash said that fee caps cost it $26 million during the most recent three-month reporting period.

DoorDash has already filed suit to block a cap on fees put into effect by San Francisco.

DoorDash Settlement Would Pay a Paltry $180 to Workers Instead of Making Them Employees

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DoorDash Settlement Would Pay a Paltry $180 to Workers Instead of Making Them Employees

DoorDash is clearing a suite of U.S. class-action lawsuits from Massachusetts and California off its plate, just as it marches ahead with extended battles in those states against employee classification. The company’s proposed settlement for claimants in 11 cases results in a predictably lousy payout for workers who’ve been fighting for years for employee classification and a minimum wage; of the $US100 ($137) million settlement fund, $US28 ($38) million has been allocated for lawyers, and an estimated $US130 ($178) for each Dasher who makes a claim.

“$US130 ($178) dollars is a complete joke,” a spokesperson for the labour rights campaign Gig Workers Rising told Gizmodo. “Doordash CEO Tony Xu took home $US413m last year. They can afford to pay workers way, way more.” Last year, Xu received one of the largest CEO compensation packages of all time. Meanwhile, DoorDash has earmarked approximately $US61 ($83) million of its settlement for Dashers. DoorDash will allocate $US10,000 ($13,680) each to named plaintiffs who filed the suits.

None of the lawyers contacted in those cases have responded to Gizmodo’s request to confirm that the settlement on the site is authentic, and it doesn’t yet appear on the case docket. On Wednesday, DoorDash confirmed to Gizmodo that the linked site is a description of the settlement agreement.

That sum falls scandalously short of the requests Dashers had initially made. The settlement lumps together two ongoing suits, and eight pending ones, under a 2017 case Marko v. DoorDash, Inc., in which three Dashers asked that the court force the company to give Dashers employee status to which they are entitled under California’s labour code. They claimed that they were owed work expenses, overtime pay, and minimum wage, among other forms of compensation.

DoorDash promises that as a result of the settlement, it’ll start giving drivers in California and Massachusetts the entirety of their tips, without DoorDash deducting them from their pay. But the company already supposedly resolved that issue in 2019 and reached a separate $US2.5 ($3) million settlement with aggrieved drivers last year.

DoorDash’s decision to settle this bundle of suits is interestingly timed, in the scheme of its joint campaign with Uber and Lyft to permanently shield itself from classifying workers as employees. Doing so would force it to pay minimum wage, unemployment insurance, and potentially reckon with unions. Last year, California passed a law that would do just that, but rather than follow the law, DoorDash, Uber, and Lyft led the charge to overturn the hard-fought policy with their own ballot measure Prop 22.

The companies wrote in provisions making it incredibly difficult for lawmakers to repeal, and they spent over $US200 ($274) million to deceive the public into believing that it was a workers’ rights measure. A Los Angeles superior court judge found that the ballot measure’s stated purpose was an outright lie, writing that its actual M.O. — squashing collective bargaining, minimum wage requirements, and safety provisions — served “only to protect the economic interests of the network companies in having a divided, ununionized workforce.” The companies have said they plan to appeal the ruling, and DoorDash said in a defiant statement that “Prop 22 remains in full effect.”

Now in the settlement agreement, DoorDash writes that both sides reached an agreement after “considering the risks and uncertainties of continued litigation.” DoorDash claims that the plaintiffs risk losing their cases if the courts enforce the company’s arbitration agreement, dictating that independent contractors can’t sue. DoorDash doesn’t specify its own risks, but it seems that another judge ruling in favour of allowing those workers to sue, and employee classification, would be on the list.

DoorDash notes in the settlement agreement that it still considers Dashers independent contractors and that the court has not ruled in favour of either side. The judge is set to issue a final decision on November 30th.

Due to the locations of the suits, you’ll only qualify for the $US130 ($178)-ish payout if you’ve Dashed in Massachusetts between September 26, 2014, through March 31, 2021, or California from August 30, 2016, through December 31, 2020. If that’s you, you can file a claim here.