Maplebear, Inc doing business as Instcart, a grocery delivery service company, is facing a lawsuit for allegedly deceiving consumers through its optional service fees.
On Thursday, District of Columbia (D.C.) Attorney General Karl Racine announced that he sued Instacart for charging consumers millions of dollars by deceiving them into thinking that its optional service fees were tips for its delivery workers.
According to the Attorney General, Instacart did not use the optional service fees to increase the wages of its delivery workers. Instead, the company treated the fees as an extra source of revenue.
Instacart allegedly violated D.C.’s consumer protection and tax laws
The company started operating in D.C. since around 2014. Consumers place grocery orders through Instacart’s app or website. Freelance delivery workers also are known as “gig economy” workers select and deliver the groceries to consumers.
From September 2016 to April 2018, Instacart charged D.C. consumers a default 10% service fee for its delivery services. Consumers thought the service fee was a tip because they have the option to decrease, increase, or waive it. There was no tip option at the checkout.
