FALMOUTH, MA – APRIL 8: Instacart shopper Loralyn Geggatt delivers a delivery to a customer’s home during the COVID-19 pandemic in Falmouth, MA on April 7, 2020. Some Amazon, Instacart and other workers protested for better wages, dangerously pay and sick time. (Photo by David L. Ryan / The Boston Globe via Getty Images)
Boston Globe
District Attorney General of Columbia, Karl Racine, announced a lawsuit against Instacart on Thursday, claiming that the messaging service raised millions of dollars by tricking customers into thinking an optional service fee would be used as a tip for workers, then. t it went to the company instead,
The suit echoes an earlier charge against food delivery service DoorDash. Racine sued DoorDash in November, claiming they would mean tips in the pocket for fraudsters and customers deceived about where their money would be directed.
According to a press release announcing the package, Instacart consumers used an option to tip at checkout, with a standard percentage of 10% that users can customize. But in 2016, according to the Attorney General’s Office, Instacart replaced the tip section with an optional service area, located in the same location, with an adjustable 10% standard rate. Instacart changed this practice in April 2018, according to the release, following media reports and contact from the Attorney General’s Office. Racine’s office claims Instacart did not make it clear that these fees were optional and that they would cover Instacart’s delivery and operating costs.
Although the alleged behavior happened years ago, the lawsuit comes as the coronavirus pandemic has renewed attention to the gig economy and workers who have worked through it. Some Instacart workers went on strike in March, demanding better payroll and personal protective equipment (PPE), as they risked losing their jobs. Instacart added extra pay and incentives when workers spoke out for safety measures.
In the case, it is also alleged that Instacart violated the DC tax law by not collecting hundreds of thousands of dollars in sales tax on its delivery and service costs. The attorney general is seeking restitution for clients who have paid the allegedly fraudulent fees and to collect the taxes he believes the district owes along with interest, civil fines and expenses.
“Instacart is misleading District consumers into believing they are delivering workers for groceries when the company actually charged them extra fees and pocketed the money,” Racine said in a statement. “Instacart used these fraudulent fees to cover its operating costs while not paying DC taxes. We have filed a lawsuit to force Instacart to honor its legal obligations, pay DC the taxes it owes, and return millions of dollars. to give to District consumers who cheated the company. “
Instacart did not immediately respond to a request for comment.
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