News Release — DC Office of the Attorney General
August 19, 2022
MEDIA CONTACT:
Office of Communications
WASHINGTON, DC – Attorney General Karl A. Racine today announced a $2.54 million settlement with Instacart, an online delivery company, resolving a lawsuit alleging that the company misled DC consumers, used tips left for workers to boost the company’s bottom line, and failed to pay required sales taxes.
In a 2020 lawsuit, the Office of the Attorney General (OAG) alleged 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—but instead, the fees went to Instacart and the company used them to subsidize operating expenses. As part of the settlement, Instacart will pay $1.8 million to the District, which can be used to provide restitution to delivery workers and consumers and cover litigation costs. The company will also be required to abandon claims that it should not have to pay District sales taxes and release $739,057 in previously-disputed tax payments.
“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...
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