D.C. sues Instacart, alleging ‘deceptive’ service fees and unpaid sales taxes
Racine’s office says Instacart implemented a mandatory service fee in 2018 after media reports highlighted the issue but has since refused to refund customers who they say were deceptively charged.
The suit, filed in D.C. Superior Court, also claims Instacart failed to collect sales tax on the service and delivery fees it charged users for the entire time it has operated in D.C.
“Instacart tricked District consumers into believing they were tipping grocery delivery workers when, in fact, the company was charging them extra fees and pocketing the money,” Racine said in a statement. “Instacart used these deceptive fees to cover its operating costs while simultaneously failing to pay D.C. sales taxes. We filed suit to force Instacart to honor its legal obligations, pay D.C. the taxes it owes, and return millions of dollars to District consumers the company deceived.”
In a statement Thursday, the San Francisco-based company called the lawsuit meritless and argued that customer transparency is “incredibly important.”
“In our product, we disclose to customers that tips are always separate from and in addition to any service fees, and we clearly indicate that service fees go towards our operations,” the statement said. “Additionally, 100% of customer tips always go to Instacart shoppers who are providing an important essential service for customers.”
Racine sued the popular food delivery service DoorDash last year, accusing the company of pocketing millions in worker tips and using them to cover labor costs.
