WASHINGTON - 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.
Attorney General Karl A. Racine that Instacart must pay $2.54 million as a result of the settlement.
InstaCart employees fulfill orders for delivery at the new Whole Foods Market Inc. store in downtown Los Angeles, California, U.S., on Monday, Nov. 9, 2015. Located beneath the recently opened Eighth & Grand residences, the 41,000-square-foot
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.
WASHINGTON, DC - DECEMBER 14: District of Columbia Attorney General Karl Racine speaks during a news conference on the January 6th insurrection December 14, 2021 on Capitol Hill in Washington, DC. Racine announced that the District of Columbia is sui
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."
The Instacart website on a laptop computer arranged in Hastings-on-Hudson, New York, U.S., on Monday, Jan. 4, 2021. A booming market for U.S. initial public offerings shows no sign of slowing in 2021. Grocery-delivery company Instacart Inc. is prepar
You can read more about the lawsuit here.