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N.Y. agreement illustrates a darker aspect of online ordering

online credit card ordering

A darker aspect of online ordering was brought into focus by the announcement yesterday of a settlement between New York and a two-restaurant operator accused of keeping deliverers’ electronic gratuities.

New York City operator Wallace Lai admitted to keeping tips that were charged to credit cards when customers paid for delivery orders placed through such services as GrubHub, Seamless and Delivery.com. Those services enable customers to skip the tradition of tipping their delivery driver in cash. Instead, gratuities are channeled back to a restaurant with an expectation the money will be passed along to the employees who actually lugged the food to patrons’ homes or offices.

Lai did not forward the gratuities for deliveries ordered from his two Hong Kong Stations between May 2014 and January 2015, according to New York Attorney General Eric Schneiderman. The $15,000 collected from Lai will be used to compensate 10 deliverymen for the tips they were denied, along with any wages or overtime pay they are due.

“It is outrageous that a business would cheat its workers and hoodwink customers by keeping tips that are meant for these hardworking employees,” Schneiderman said in announcing the deal.

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