Food Delivery Company That Kept Workers Tips Changes Policy After News Report

After outrage from a media coverage, a food delivery app is changing how it treats worker tips. But many are unsure what the change actually means.

The New York Times reports:

“DoorDash, the nation’s biggest on-demand food-delivery app, is dropping a widely criticized tipping policy that effectively meant customers’ tips were going to DoorDash rather than the worker who delivered their meal.

The decision follows days of widespread outrage and angry customer complaints about the policy after a New York Times reporter described in an article what it was like to work as a deliveryman for the company . . .

‘Going forward,’ DoorDash’s chief executive, Tony Xu, wrote on Twitter on Tuesday night, ‘we’re changing our model — the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days.’

For DoorDash’s 400,000 delivery workers, known as Dashers, the ‘specific details’ hold the key to whether the decision actually increases the money that goes in their pockets.

Under the policy, which the company adopted in 2017, DoorDash would offer a Dasher a guaranteed minimum amount to do a delivery. If a customer tipped, a tip paid through the app would go mostly to subsidizing DoorDash’s contribution toward the guarantee, rather than increasing the Dasher’s pay.

For example, if DoorDash guaranteed a worker $7 for a delivery and a customer did not tip, DoorDash would directly pay the worker $7. If the customer tipped $3 via the app, DoorDash would directly pay the worker only $4, then add on the $3 tip so that the worker would still get only $7.

While the announcement is good news for customers who would like to think that their tips are going to increase a worker’s earnings, the implications are much less clear for the Dashers themselves.

There is no such thing as minimum wage in the piecework world of on-demand delivery. Also, the apps frequently adjust their complex pay models, which include incentives for working during rush periods and volume bonuses for doing a certain number of deliveries in a set time.

On a forum for DoorDash workers on Reddit, some Dashers greeted the news with concern that DoorDash would simply pay them less to make up for the revenue it would lose by not using tips to subsidize labor costs.

‘I’m worried that the orders will guarantee less now, but we get all the tips,’ wrote a Reddit user named Dmillz648. ‘Meaning a previously guaranteed 10-dollar order might now only guarantee 5 bucks, and you get a 2 dollar tip, meaning you got 7 bucks for that order.’

‘That’s my worry too,’ replied a user named williams91. ‘And it saved me in times that I’ve been stiffed, so we’ll have to see the model. I’m nervous but excited.'”

For the rest of the story, visit The New York Times here.

You may also like:

Join our mailing list for the latest union news!

Leave a Reply