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Yelp Sued for $5 Million by Eat24 Drivers for Withholding Tips

Yelp denies all claims in the class action lawsuit.


It looks like when Yelp acquired food delivery app Eat24 for $134 million back in February, they thought gratuity was included. According to Fortune, a complaint was filed on July 10 by Eat24 drivers against Yelp for unpaid tips. The class action lawsuit claims that while Eat24 encouraged customers to leave a tip, they failed to give any portion of that money to the drivers. In most cases, drivers weren't aware that tipping was an option for consumers.

The suit was filed in San Francisco, the heart of the food-delivery app boom, by Sidecar employees Steven Kay and Esteban Polonski, who are seeking $5 million in damages on behalf of other drivers across the U.S. In an attempt to clear its name, Yelp responded to the complaint in an email suggesting the drivers' gripe may instead be with Sidecar. The email explains, "To be clear, neither Yelp nor Eat24 hire or contract with any delivery drivers. For Sidecar-made deliveries, Eat24 sends all tips to Sidecar, who we understand then distributes those tips to Sidecar drivers."

This isn't Yelp's only recent court case. While some Yelp users have been found guilty of misusing the site, the court ruled in the company's favor in April, dismissing a federal class action suit claiming it had defrauded shareholders. Rumors of a possible sale have also put the review site in the spotlight, creating speculation surrounding who the potential buyer may be. However, the latest news suggests that CEO Jeremy Stoppelman has put a halt on the sale of the company.