Delivery apps like DoorDash are using tips to pay workers’ wages

https://www.theverge.com/2019/7/22/20703434/delivery-app-tip-pay-theft-doordash-amazon-flex-instacart

by oblib • 7 years ago

75 57 7 years ago

blakesterz• 7 years ago

ah, I thought this was for sure a repeat, but apparently only some places changed when this first broke earlier in the year...

"Following outcry, Instacart scrapped the policy and promised to retroactively compensate workers. But DoorDash and Amazon Flex didn’t budge. They still use tips to make up base pay on some of their deliveries. Even more annoyingly, it can be difficult for workers to know when this is even happening because of a lack of transparency in how they’re paid (DoorDash, though, recently rolled out changes to make the source of earnings clearer)."

vorpalhex• 7 years ago

DoorDash also has terrible customer service which caused me to stop using them long ago. This policy in particular should be illegal without disclaimer (I'm intending to give money as a tip to my dasher, not fund DoorDash Inc) and is atrocious business practice.

NikolaeVarius• 7 years ago

I think this should just be consolidated into the original article discussed https://news.ycombinator.com/item?id=20490687. The verge really isn't adding much

mcphage• 7 years ago

The thread you're linking to only has 2 comments.

csunbird2• 7 years ago

Always pay the tip in cash to avoid this kind of tactics from companies.

pg_bot• 7 years ago

If you're going to tip, do it in cash and hand the money directly to the person that you're tipping. It is a fairly safe assumption that a third party collecting tips is going to pull some nonsense on that worker.

cpeterso• 7 years ago

Tipping $0 on the site with the intention of handing cash to the driver means the delivery payout (which includes the site tip) displayed to drivers will be lower. Drivers are more likely take your delivery job if it has a higher payout. I don't know if the system breaks out the site tip in the delivery payout. If it did, people could enter a magic number to signal to drivers that they intend to tip in cash on delivery.

thatswrong0• 7 years ago

I’ve been setting my tip in app to be the number I intend to tip in cash and then I just 0 the tip out afterwards. Don’t use apps that don’t allow me to change the tip after the fact (but hopefully drivers don’t get dinged for that change somehow)

bcheung• 7 years ago

The website lets you pay $0 for tip so you can tip in cash. I haven't found a way to set the tip in the app. Unfortunately, the website is much less reliable than the app and frequently has issues.

w3rhn2j34oh5o• 7 years ago

they say 'tip in cash', but I never have the physical cash to tip. This always brings me anxiety when I dont have the physical small bills to provide. I would ensure I use a platform (as mentioned in the article, like grubhub or seamless) that doesn't garnish the electronic tips for pay.

inetsee• 7 years ago

It's gotten to the point where I almost always use a card to pay for things, but I also have some cash with me most of the time (on the order of $50, including $5s and $1s) just for occasions like this.

tempsy• 7 years ago

I'm confused why this has become a story again. Recode reported this back in March and there was a bunch of controversy about it raised back then, with Instacart reversing course and DoorDash doing nothing.

I think it speaks more to how quickly we get outraged and forget than anything else.

lovehashbrowns• 7 years ago

Because DoorDash still hasn't reversed their policy and because a lot of people still don't know that DoorDash does this.

phil2482• 7 years ago

People also don't know that restaurants do this. People generally are not aware of, and do not care about, the specifics of labor practices outside of their own industry.

dang2• 7 years ago

Previous threads:

https://news.ycombinator.com/item?id=19109455

https://news.ycombinator.com/item?id=19122521

https://news.ycombinator.com/item?id=19099474

https://news.ycombinator.com/item?id=19097719

https://news.ycombinator.com/item?id=19029801

https://news.ycombinator.com/item?id=18853232

flexer23• 7 years ago

Amazon Flex does this as well. I signed up to do deliveries last year to see how it worked, and on a couple occasions gamed it such that I was able to deliver an order I placed to myself (which is really just ordering from a nearby restaurant and hoping you get the offer). The advertised pay I would get for the delivery before accepting it was $7-12 (the range is supposed to account for tips, and across all deliveries, when everything settled it was almost always the low end of that range). With Amazon Restaurants, you had to tip when you ordered, and couldn't change afterwards, and my tip was $3. When everything cleared, I got $7, and I knew $3 of that was my own tip to myself. Had I tipped $0, I would still have gotten $7. I always felt it was a crummy thing to do to people -- your tip was just making Amazon give the driver less money. Not being able to change the tip also sucked, as I don't like tipping when I haven't received anything yet. That's more of a "name your price" service fee.

Amazon has dropped out of the restaurant game, but they still probably do this for Prime Now and Whole Foods (package deliveries aren't eligible for tips). The funny thing with restaurants was during peak times, when they didn't have enough drivers, they'd send out guaranteed $22 offers to delivery maybe $20 worth of food, which I always pounced on as it was incredibly easy money. It's no wonder they couldn't keep that business going.

Tips sometimes worked out well, though -- on some Prime Now routes where it was maybe $20-30 guaranteed, I'd get over $60 after tips. So they weren't always keeping everything to themselves. I could never figure out the rhyme or reason behind any of it.

loco5niner3• 7 years ago

Amazon Flex does this well.

I feel like you intended this to be "Amazon Flex does this AS well"

... which is the difference between saying "they ALSO do this" and "they do a good job at this".

flexer23• 7 years ago

typo, fixed

loco5niner3• 7 years ago

Odd that someone downvoted me AFTER the OP stated it was a typo and fixed it.

PretzelFisch• 7 years ago

Do you know if the tip was for delivery or for the restaurant?

flexer23• 7 years ago

It's for delivery.

bryanlarsen2• 7 years ago

Note that lots of restaurants do this too. Federal law lets an employer steal the first $5.12 of tips and many states have similar laws.

From wikipedia:

"The United States of America federal government requires a wage of at least $2.13 per hour be paid to employees that receive at least $30 per month in tips.[4] If wages and tips do not equal the federal minimum wage of $7.25 per hour during any week, the employer is required to increase cash wages to compensate.[5]"

It's phrased to sound like a top-up but it's theft in my opinion.

phil2482• 7 years ago

Laws by definition mean it is not theft, but yes, this practice is widespread, legal and has been around far longer than the new tech-oriented contract workforce.

calvinmorrison• 7 years ago

I think the difference is this:

randome example from above DeliverDash offers driver $7-12 range.

DeliverDash pays $7 with no tip, costing them $7

DeliverDash pays $7 with $3 tip, costing them $4

DeliverDash does not pay $2.13 hourly.

DeliverDash does not even have employees doing deliveries. They are contractors.

Am i reading this wrong?

basch• 7 years ago

do you consider servers not declaring 100% of their tips theft as well?

cdmckay• 7 years ago

What exactly are you arguing here?

mjevans• 7 years ago

I agree.

I'd like two things:

1) Tips to actually be tips, and OPTIONAL.

2) Real wages that are static for the restaurant (a base wage, calculated to properly compensate the employee without tips).

Please stop adding a hidden tax to items on menus.

csunbird2• 7 years ago

It works like what you mentioned in most of the world but for some reason, it works differently in United States.

zymhan2• 7 years ago

You're gonna have to explain that one more

bryanlarsen2• 7 years ago

Restaurants advertise an hourly rate ($7.25/hr or $15/hr, whatever) but in reality it is $2.13 + tips.

rhizome5• 7 years ago

the difference there is that the wage doesn't change with the amount of the tip, and that consistent wage is communicated up front. Yes, the tip-wage sucks, but surprisingly it's more honest than this.

VectorLock• 7 years ago

I went to the bank and got an envelope of $5ers that I keep around just for delivery drivers now.

I'd love to see how much DoorDash's "tip" revenue has declined since this seems to now be much more widely known.

oceanghost• 7 years ago

I applaud this article for calling this what it is... Theft.

stillbourne• 7 years ago

Then don't tip.

galkk• 7 years ago

Just another nail in what should be coffin of the general "tipping" culture. If I enjoy the food, I should be able to tip the cook, why I need to tip someone who's job is to drive the order to me?

overcast• 7 years ago

Servers generally tip out a percentage to the guys behind closed doors. That means cooks, dishwashers, etc.

zzzeek2• 7 years ago

how do you know it's the cook's recipe and preparation process and not that of a head chef or manager? The "cook" could just be pushing some buttons they were told to push for all you know.

rhizome5• 7 years ago

because you apparently don't want to go pick it up with your car and your time. are you really being serious?

AndrewStephens• 7 years ago

This is just what tips are.

People (in the US) are used to tipping in restaurants but many don't realize that in almost every case the restaurant is using those tips to top up the wages they should be paying the servers anyway.

So the restaurant can pay the server much less than the minimum wage - your tips just make up the difference until the server makes some minimum. What DoorDash is doing here isn't any different except that servers usually manage to make more in tips.

In conclusion, tipping culture sucks and the sooner employees start paying decent base wages the better.

zelon883• 7 years ago

This is why, instead of essentially promoting the next wave of "too-big-to-fail" monopolies, we should be trying to franchise things like this.

I had the idea a while back when someone I knew was getting the run around by Uber.

If someone developed a platform that catered to franchisees instead of end-users (and contractors) it would be easier for everyone. Easier to price the service, easier to pay the workers, easier to negotiate, easier to run the business in a smaller scale.

So instead of Uber or DoorDash having 2,000,000 contractors, they have 10,000 franchises with each one maintaining it's own affairs. Everybody wins!

leetcrew• 7 years ago

why would that make anything better? sounds like you would just add an additional rung of people who don't actually drive anywhere but still need to be paid.

zelon883• 7 years ago

I think the savings from reduced liability and simplified corporate structure would offset the costs. Let's face it, Uber doesn't make money as it is and neither do Uber drivers once you factor in all the expenses.

But if you can shift the liability for driver satisfaction and compensation off of Uber and onto it's franchises suddenly Uber isn't making 10,000,000 transactions per day. They're only making 10,000 transactions per month. That's money making interest for Uber instead of drivers. Also, Uber no longer makes money from rides. They make money by selling franchise rights and access to the platform for franchisers. The franchise is responsible for turning a profit from rides, and also for ensuring their employees are compensated.

There would also be an increase in efficiency. Currently my friend starts off 30m south of Boston for Uber, but her rides typically take her north of Boston within a few hours. Uber doesn't care how far out of her way she's going. When she inevitably shuts off her app she must then drive 2 hours to get home. If each franchise had it's own "turf" this could be organized and reduced. The result is less wasted fuel/time for the drivers and a smoother ride because drivers stay in areas they're comfortable and familiar with.

latortuga• 7 years ago

As a relatively frequent customer of DoorDash, I have a pet theory working. I have tried this "pick $0, tip in cash" approach and it works fine for the driver - they get the money, I get the satisfaction of knowing they got the whole tip, and I get to extract the maximum value from all the VC money subsidizing these delivery companies.

But I have also seen that I am now getting deliveries where I am 3rd or 4th stop and by the time the food arrives, it is cold. My conspiracy theory is that doordash is trying to drive me away from their platform because of my $0 tips. Anyone else notice this when tipping $0?

evilolive• 7 years ago

both good reasons for your future boycott of door dash! Are there other food delivery services who have clearly explained fee structures?

teddyc• 7 years ago

Restaurants do this. They are required to pay minimum wage if the $2.15/hr + tips doesn't average out to be at least minimum wage. As a restaurant owner, you can add lots of hours at $2.15/hr before you have to pay anything extra out of pocket.

That's how they are able to force waitstaff / bartenders to do setup / cleanup for $2.15/hr.

Delivery apps like DoorDash are using tips to pay workers’ wages

Related Stories