The complaint points to a since changed Instacart policy in place from September 2016 to April 2018, in which, in addition to a delivery fee, the company charged its consumers a 10% “service” fee that could be increased, decreased or dismissed.
“For a reasonable consumer, these service charges looked like a tip,” according to the complaint, issued by the Office of the Attorney General Thursday.
“Instacart is misleading District consumers into believing they are delivering workers for groceries when the company actually charges them extra fees and pockets the money,” Attorney General Racine said in a statement.
In a statement to CNN Business, Instacart said that “customer transparency is incredibly important” for the company and that “we clearly state that service delivery goes to our operations.”
“We believe the allegations made in this complaint are unfounded. We are disappointed with today’s action by the office of DC Attorney General Racine and we welcome the opportunity to continue an open dialogue on these matters,” read the statement.
The lawsuit also alleges that Instacart “failed” to collect district sales tax on service and delivery costs during the entire time the company was operating in the District.
In its statement, Racine said: “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, DC to pay the taxes it pays debt, and giving millions of dollars back to District consumers has deceived the company. “
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