Case On Point
In Re: Drizly, LLC
(N. Y. Office of the Attorney General Labor Bureau 2024)
Drizly, LLC operated a website through which consumers could place orders for the delivery of alcoholic beverages from local liquor stores. The stores delivered the liquor using their own employees or through third party delivery services. The Drizly platform encouraged customers to add a tip for the driver, but did not disclose there was no assurance the tip would actually reach the driver. Rather, the tips were disbursed to the stores, which might or might not pass them on to the driver. The New York Attorney General's Labor Bureau commenced an investigation and contended that the Drizly platform defrauded consumers into adding tips to their orders by misleading them into believing that the drivers would receive them.
The matter was settled by Drizly agreeing to pay $4 million to the Office of the Attorney General to be distributed to delivery drivers employed by the liquor stores who did not receive promised tips. Drizly also agreed to pay $200,000 towards the cost of a Settlement Administrator to manage the disbursement of the settlement funds.
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