WASHINGTON – A grocery delivery service that rose prominently in the coronavirus pandemic would pocket all fees that customers thought were tips for their delivery drivers, according to a lawsuit filed by DC prosecutors.
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AG Karl Racine’s office on Thursday announced the lawsuit against Instacart, alleging that the company violated district tax law and failed to “collect hundreds of thousands of dollars in sales tax.”
They say the company has mentioned a 10 percent “service charge” for delivery services on its website.
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Customers believed they provided a tip for drivers, and the percentage could be adjusted according to what the customer wanted to pay.
No alternative payment method for the driver appeared to be available on the site.
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District prosecutors are suing the company for consumer restitution, withholding taxes and those interested in taxes to DC
An eight-year-old San Francisco-based company, Instacart, posted its first profit during the start of the coronavirus pandemic.
After losing $ 300 million in 2019, the fate of Instacart turned around in April when the pandemic forced Americans to stay home.
In April alone, the company posted a profit of $ 10 million to an estimated $ 700 million in groceries to its customers.
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