Washington D.C. Attorney General Karl Racine is suing Instacart for allegedly charging customers with deceptive service fees and not paying sales tax on the fees. The suit claims that over an 18 month period, Instacart didn’t tell customer that optional service fees were added to their bills, which led to confusion over whether the fees were tips for delivery workers. The Office of the Attorney General says these fees were an “extra revenue source for the company” and that Instacart violated D.C. tax law by not collecting “hundreds of thousands of dollars” in sales taxes on the delivery and service fees.
“Instacart tricked District consumers into believing they were tipping grocery delivery workers when, in fact, the company was charging them extra fees and pocketing the money,” Racine said in a statement. “Instacart used these deceptive fees to cover its operating costs while simultaneously failing to pay D.C. sales taxes. We filed suit to force Instacart to honor its legal obligations, pay D.C. the taxes it owes, and return millions of dollars to District consumers the company deceived.” The suit also seeks civil penalties and restitution of legal costs.
In a statement, Instacart denied the claims, saying, “We believe the accusations made in this complaint are without merit. We’re disappointed with today’s action by D.C. Attorney General Racine’s office, and we welcome the opportunity to continue an open dialogue on these matters.”
Related: NY AG Files Price Gouging Suit; Instacart Files Suit Against Uber's Cornershop Delivery Service.
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