More than 8,300 delivery workers allegedly cheated out of tip money by defunct alcohol-delivery platform Drizly will share a $4 million payout – or about $500 apiece – under a restitution agreement announced Monday by the New York attorney general’s office.
The funds will go to former delivery workers across the state, including 1,375 in New York City, where stores in every borough partnered with Drizly, the attorney general’s office said. The agreement includes an additional $200,000 payment to a settlement administrator charged with distributing the funds.
“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,” Letitia James, the attorney general, said in a statement.
James added: “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.”
Ashley L. Taylor Jr., an attorney representing Drizly, declined to comment on the agreement, which resolves allegations of wage theft and fraud. In court documents, Drizly admitted no wrongdoing.
The agreement adds to a growing list of recent recoveries from local employers accused of not paying workers, including $17 million for home health care workers, $328 million to app-based delivers, and lesser amounts to employers ranging from pizza restaurants to laundry workers. Often, the claimants are noncitizens lacking legal immigration status, which immigrant advocates say keeps many of those denied pay from stepping forward.
Drizly began operations in New York City in 2013, was acquired by Uber in 2021 and shut down by Uber in March 2024, when Uber consolidated its food and alcohol delivery services under Uber Eats.
According to the attorney general’s investigation, Drizly pressed customers hard for tips, adding a 10% default tip, which could be adjusted, on every tab. The platform begged, “We humbly ask that you tip drivers, as they are critical in making every Drizly delivery a reality.”
But the platform did nothing to ensure the tip proceeds went to workers, according to the attorney general’s office. It said Drizly instead sent all of the tips to store owners, and encouraged stores to engage in “tip pooling,” or splitting tips among all employees, rather than earmark funds for those who earned the tips. Tip pooling is unlawful for liquor store workers in New York, the attorney general’s office noted.
Drily “did not implement any mechanism to ensure the delivery workers received the money intended for them. As a result, many delivery workers did not receive all of the tips they earned,” the office’s investigation determined.
Eligible workers delivered for Drizly from Jan. 1, 2018, through August 2023, according to court documents. In New York City, the overwhelming majority of delivery workers are non-white, more than 80% work full-time as deliverers and nearly half support a child or family members on their delivery wages, according to data cited by the attorney general.