New York Attorney General Letitia James has secured a $4 million settlement from Drizly, an alcohol delivery platform owned by Uber, for withholding tips meant for delivery workers. The Office of the Attorney General (OAG) discovered that Drizly misled customers into believing their tips would go directly to the delivery workers. Instead, these tips were sent to store owners who decided how they would be distributed.
Attorney General James stated, "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." She emphasized the impact of such practices on workers living paycheck to paycheck.
Drizly operated in New York since 2013 and was acquired by Uber in 2021 before being shut down in March 2024. It allowed customers to order alcohol for home delivery from local stores. More than 2,400 stores across New York participated in the service.
The investigation revealed that over 80% of Drizly orders were delivered by store employees who did not automatically receive their tips through the app. Drizly encouraged unlawful "tip pooling" among all employees rather than direct distribution to delivery workers. This led many workers not receiving their full earnings.
As part of the resolution, Drizly will pay $4 million in restitution and an additional $200,000 for a settlement administrator tasked with distributing funds to at least 8,385 affected delivery workers. The case is part of ongoing efforts by Attorney General James against wage theft.
Previous actions by Attorney General James include recovering millions from various companies for wage theft and fraud against employees. The matter was handled by Assistant Attorney General Jessica Agarwal and others under supervision within the Labor Bureau of the Division for Social Justice.