New York Attorney General Letitia James announced today that her office has secured $4 million in restitution for delivery workers who were denied tips they rightfully earned through the Drizly alcohol delivery platform. Drizly, which was acquired by Uber in 2021 and shut down in March 2024, is accused of misleading customers about how tips were distributed, leading to the withholding of money intended for delivery workers.
The investigation, conducted by the Office of the Attorney General (OAG), uncovered that Drizly encouraged customers to tip their delivery drivers via its platform, even offering a default 10 percent tip at checkout. However, despite leading customers to believe that the tips would go directly to the workers who earned them, Drizly instead sent all tips to liquor store owners. The store owners then had control over how, or if, the tips were passed on to delivery workers.
The OAG’s findings revealed that over 8,300 delivery workers employed by 2,453 liquor stores across New York state were affected by the practice. These workers, many of whom rely on tips to make ends meet, were often denied the full amount of money customers intended them to receive. The investigation also uncovered that Drizly promoted “tip pooling” practices, where tips were divided among all employees at a store, including those who did not deliver the alcohol. Tip pooling is illegal for delivery workers in New York, further exacerbating the problem.
Attorney General James condemned Drizly’s failure to ensure that delivery workers received the tips they were entitled to. “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 said. “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.”
As part of the settlement, Drizly has agreed to pay $4 million in restitution to delivery workers who were impacted by the company’s actions. An additional $200,000 will be allocated for a settlement administrator to track and distribute the funds to over 8,300 affected delivery workers. The restitution will ensure that workers receive the tips they were rightfully owed, which had been diverted to store owners instead of being given to the delivery workers themselves.
The issue of unpaid or withheld tips has been a longstanding concern for gig economy workers, particularly in industries like food and alcohol delivery. According to surveys in New York City, a significant portion of Drizly’s delivery workers are non-white, with over 80 percent working full-time. Nearly half of these workers are supporting children or family members through their earnings. For many of these workers, the restitution will provide critical financial relief.
This settlement is part of a broader effort by Attorney General James to combat wage theft and ensure that New Yorkers receive the wages they are owed. Earlier this year, James secured significant settlements from companies involved in wage theft, including a $328 million settlement with Uber and Lyft and a $17 million recovery for home health care workers.
Attorney General James has vowed to continue fighting for fair wages and protections for workers in New York. “My office will always take on companies that mislead their customers and workers and undermine the laws meant to protect them,” she added.
