Drizly, a now-defunct alcohol delivery platform owned by Uber, will pay $4 million in restitution to more than 8,300 delivery workers across New York state after an investigation by the office of New York Attorney General Letitia James uncovered that the company withheld tips intended for them.
The probe found that Drizly misled customers into believing that tips left at checkout would go directly to delivery workers, according to a press release. Instead, the tips were sent to liquor store owners, who decided how to distribute them. This practice impacted thousands of delivery workers employed by 2,453 liquor stores statewide, including 1,375 in New York City and 367 in Brooklyn.
“Drizly misled its customers by encouraging them to tip and then failing to make sure those tips went to the delivery workers who earned them,” said James. “So many delivery workers work paycheck to paycheck and denying them their hard-earned tips could mean the difference between making ends meet and not being able to put food on the table. Now, we are finally returning this money to those who actually deserve it and who customers intended it would go to.”
Drizly operated in New York from 2013 until Uber shut it down in March after it consolidated its food delivery services to Uber Eats.
The company facilitated alcohol deliveries from local stores. More than 80% of Drizly orders in New York were fulfilled by store-employed delivery workers. The investigation also found that the company encouraged stores to engage in “tip pooling,” splitting tips among all employees, an unlawful practice the company failed to disclose to customers.
As part of the settlement, Drizly will pay $4 million in restitution to delivery workers, plus $200,000 to cover the costs of administering the settlement. Affected workers include 8,385 individuals, many of whom are non-white, work full-time in delivery roles and rely on their income to support families.
