Over 500 Long Island Stores Used Its Platform
By Hank Russell
New York Attorney General Letitia James recovered $4 million in withheld tips from Drizly, a now-defunct alcohol delivery platform owned by Uber. James alleged Drizly failed to ensure delivery workers received their rightfully earned tips. An investigation by the Office of the Attorney General (OAG) found that Drizly allegedly actively encouraged customers to leave tips for delivery workers, even including an automatic 10 percent tip at checkout. However, Drizly led customers to believe that the entirety of those tips would go directly to the delivery workers who earned them, when, in fact, all tips instead went to store owners for distribution.
As of August 2023, over 80 percent of Drizly orders were being delivered by store employees, according to the OAG.
Drizly was an online alcohol delivery platform that began operations in New York in 2013. Uber acquired Drizly in 2021 and shut it down in March 2024, after Uber decided to consolidate its food and alcohol delivery services into one platform, Uber Eats. Through Drizly, customers were able to purchase alcohol from local stores for delivery to their homes. In New York State, 2,453 stores used the Drizly platform, 508 of which were located on Long Island.
Liquor stores using Drizly had the option to either outsource deliveries or to employ their own delivery workers. For delivery workers employed by the stores, including more than 8,300 workers at 2,453 stores throughout New York State, Drizly sent all of the tips to the store owners, who then decided how tips would be distributed. Drizly failed to adequately notify customers that the tips would not go directly to delivery workers or clarify that stores were responsible for tipping their employees. Instead, many customers were led to believe that the full amount of the tip they paid was going to the delivery worker who delivered their order.
In addition, Drizly encouraged liquor stores to engage in “tip pooling,” or splitting tips among all employees rather than giving them directly to the workers who earned them, a practice that is unlawful for liquor store employees in New York. Despite this, Drizly continued to encourage this practice and did not implement any mechanism to ensure the delivery workers received their tips. As a result, many delivery workers did not receive all of the tips they earned.
In addition to paying the $4 million, Drizly must also pay an additional $200,000 for a settlement administrator, who will track and disburse the restitution funds to these delivery workers. At least 8,385 delivery workers stand to receive settlement funds from this settlement.
“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,” James 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. Now, we are finally returning this money to those who actually deserve it and who customers intended it would go to. My office will always take on companies that mislead their customers and workers and undermine the laws meant to protect them.”
This is not the first time controversy surrounded Drizly. In 2022, the Federal Trade Commission (FTC) filed a complaint against the company and its then-CEO, James Cory Rellas, when they failed to rectify a security breach in 2020, exposing the personal data of its 2.5 million customers to vulnerabilities. The FTC also contended that Drizly neglected to monitor security threats, failed to implement basic security measures and stored critical database information on an unsecured platform.
Long Island Life & Politics reached out to Uber Eats for comment. LILP has not heard back as of press time.