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Delivery Apps Like Doordash Are Using Your Tips To Pay Worker Wages

Posted: Jul 22, 2019



Extending the predatory practice of tipped wages into the app economy

When you order food through an app and tip the worker who delivers it, you’d be forgiven for thinking that the money you give goes directly to that person. But in reality, some delivery apps use your tip to make up the worker’s base pay — essentially stealing the money you’re trying to give someone to maximize their profits.

This isn’t a new practice by any means, but a recent report from The New York Times highlights how DoorDash, the most popular food delivery app in the US, enforces it.

Here’s Times reporter Andy Newman:

DoorDash offers a guaranteed minimum for each job. For my first order, the guarantee was $6.85 and the customer, a woman in Boerum Hill who answered the door in a colorful bathrobe, tipped $3 via the app. But I still received only $6.85.

Here’s how it works: If the woman in the bathrobe had tipped zero, DoorDash would have paid me the whole $6.85. Because she tipped $3, DoorDash kicked in only $3.85. She was saving DoorDash $3, not tipping me.

It’s worth noting that this is not some novel form of exploitation. DoorDash’s policy is the equivalent of a “tipped wage,” a common practice in America where employers pay workers less than the minimum wage and rely on tips to make up the payments they owe. Apps like DoorDash are essentially just extending established bad labor practices into the world of tech. (And this is before we get into the wider debate as to why tips, in general, suck.)

But just because something is common doesn’t make it fair. Stories earlier this year from NBC News and the Los Angeles Times highlighted how Instacart and Amazon Flex also use tips to make up pay. One consumer advocate described these practices as “completely deceptive.”

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).

The Verge reached out to other firms in this sector to check their own policies. Postmates, Grubhub, Seamless, and Uber Eats all confirmed that customer tips are not used to subsidize workers’ pay.

The battle for fair treatment of delivery workers is bigger than just tips, of course. It’s about guaranteed wages and whether or not companies will recognize these individuals as full-time employees, with all the rights and responsibilities that this entails. In the meantime, if you want to make sure your delivery worker gets your tip, here’s a simple hack: use cash.

By James Vincent
July 22, 2019
Source: Theverge.com


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