DC announces $2.54 settlement with Instacart over claims it misled consumers

August 21, 2022 – D.C.’s Attorney General announced a settlement this week with online delivery company, Instacart, over accusations that the company misled consumers in the District.

The settlement resolves a lawsuit filed by the Office of the Attorney General (OAG) in 2020, alleging that, from 2016 until 2018, Instacart falsely led consumers to believe that “service fees” charged on orders were tips that went directly to delivery workers. Instead, the fees went to Instacart and the company used them to subsidize operating expense.

The settlement payment will be broken up into two parts, with $1.8 million going toward providing restitution to delivery workers and consumers, and cover litigation costs. Another $739,057 will go toward previously disputed tax payments that Instacart now owes to the city.

The settlement also requires Instacart to ensure tips go directly to workers.

“DC consumers expect their tips to go to workers—not the c-suite,” said AG Racine. “Any business operating in the District must provide consumers with truthful information, pay workers the wages and tips they have earned, and pay the sales taxes that they owe. Today’s settlement with Instacart sends a clear message: any company that attempts to dodge their obligations to workers and consumers will be held accountable.”

By FOX 5 DC Digital Team
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