Back in February, Yelp was able to acquire Eat24 - a food deliver app - for $134 million. Perhaps Yelp thought that everything would be running smoothly.
Fortune reports that Eat24 drivers filed a lawsuit against Yelp for unpaid tips. The drivers are looking to receive at least $5 million in damages from the suit.
The complaint, which was filed on July 10, claims that tips from customers were never distributed to its drivers. In fact, as per Eater, most of the drivers were even unaware of the customers' tipping option.
Based on the filed complaint, "Eat24 encouraged its customers to enter a tip amount for the food they ordered, but then failed to pass on that money, or even notify the drivers of the tip in the first place," as described by Fortune.
The class action lawsuit was filed in the San Francisco federal court, where the app became an instant hit, by Sidecar employees named Steven Kay and Esteban Polonski.
The two employees aim to retrieve the $5 million in behalf of the other drivers in the country.
As the company attempts to manage the situation, Yelp responses to the complaint via email. It elaborates that the drivers' concern might be with Sidecar instead of their own brand.
"This case appears to be brought y drivers who contract with Sidecar to deliver food for orders made through Eat24. To be clear, neither Yelp nor Eat24 hire or contract with any delivery drivers," the email said.
It continued, "For Sidecar-made deliveries, Eat24 sends all tips to Sidecar, who we understand then distributes those tips to Sidecar drivers. We believe this lawsuit has no merit."
The lawsuit also alleges that Yelp has been in breach of contract, as well as claims of unjust enrichment and of breaching several California state laws.
Read the filed complaint here.
