A wave of recent scandals has focused on things that tech companies did that were legal, but nonetheless icky.
Why it matters: Companies are under constant business pressures to grow at all costs and squeeze revenue and profits wherever they can, but what seem like clever legal loopholes can backfire when customers find out.
There are tons of examples of tech companies big and small doing things that were legal but looked bad. Here are a few…
DoorDash: The company’s pay model since 2017 includes customer tips as part of the minimum amount guaranteed to its delivery workers (similarly to tipped employees such as waiters, although DoorDash’s workers are not classified as employees).
- Customers, though, were upset to learn their tips weren’t always treated as additional earnings for the delivery workers. The company says it’s trying to provide earnings in line with the work delivered while also providing a guaranteed level of pay.
- Instacart previously used a similar model, as does Amazon’s Flex program.
Grubhub: Last week, a report showed that the company had been purchasing website domains with names similar to its marketplace restaurants and only including phone numbers and links that would route food orders through its service. (Meaning it would take a cut from all orders generated from the sites.)
- The company told Axios that it had “created microsites for [restaurants] as another source of orders and to increase their online brand presence” as part of their contracts and “it has always been our practice to transfer the domain to the restaurant as soon as they request it.” It no longer offers this.
- OrderAhead was caught doing something similar in 2015.