Weaponizing tips is a bad look
Weaponizing tips is a bad look
Legislative changes put courier gratuities in the crosshairs.
On December 1, a New York City court of appeals handed big delivery — or, more specifically, Uber Eats, Grubhub, and DoorDash — a rare loss. The court denied the companies’ appeal request over a new minimum wage for contract delivery workers in the city, ending a monthslong fight between the city and delivery worker advocates and the large companies who’ve built self-serving delivery infrastructure and compensation models.
The law, which went into effect immediately after the ruling, mandates couriers earn $17.96 per hour, an amount that’s set to rise over time. And, predictably, the large delivery companies are not happy about it — they issued statements calling the law “misguided,” and disappointing. Now, we’re starting to see the first effects as the tech giants tweak policies to accommodate the new rules.
In New York City, DoorDash and Uber Eats have moved their tip prompts from the checkout screen to after the checkout screen. The move acknowledges tips as an optional add-on to reward service, a marked change from the companies’ strategies in other parts of the country.
In fact, the amount of time and energy and effort companies are spending rearranging their tip prompts underscores how critical they are to the apps’ operations. Earlier this fall, DoorDash started issuing warnings to users who didn’t include a courier tip as they checked out. “Orders with no tip might take longer to get delivered — are you sure you want to continue?” If the diner still ditches the tip, the app reminds them again: “Dashers can pick and choose which orders they want to do,” it displays.
Now, that’s out the window in New York, with the company saying the change is meant to “better balance the impact of” new costs resulting from the city’s change, per coverage in The Verge. DoorDash isn’t shy about its language: “These new regulations will force us to raise fees for orders in New York City.” [Emphasis mine.] DoorDash will also pause a program giving well-rated couriers preference for large or particularly lucrative orders.
It’s not entirely unexpected.
“Brad Lander, the New York City comptroller who sponsored his city’s bill to establish a minimum wage for food-delivery workers, told the Guardian that anyone taking on the gig economy companies must ‘suit up for the backlash.’ And he was right,” said Corey Mintz, a fellow industry reporter and author who’s covered the news closely. (This was over the summer.)
“If a business can’t pay people fairly, is it a good business?” he added. “At one point, Uber claimed that self-driving cars would be the labor-saving tool that moved the industry toward profitability. But the secret sauce has always been precarious employment terms that exploit vulnerable workers. Punishing NYC couriers seems evidence of that, with a dash of spite on top.”
The delivery companies say their couriers will earn more than the minimum in New York, measured in “active time.”
Couriers are paid for the time they actively spend delivering orders, not downtime they spend waiting for orders. This looks impressive; in New York, DoorDash says its couriers will earn at least $29.93 per hour of active time, “nearly twice NYC’s $15 minimum wage for other workers,” per the company. Uber Eats couriers will earn the same, according to a release. But as an avid freelance contributor, I can attest that “active time” does not equal “working time,” and, in fact, creates a host of other challenges for those of us leaning into flexible work. (Taxes, for one.)
Couriers will still keep all of their tips, the companies note, a frequent talking point from the services who have made tips an important part of compensation models over time. In his own op-ed for CNN, Mintz argued that DoorDash’s move to use warnings that effectively shame customers into tipping before they receive their service are a “new social contract” that casts the tip as a bid, “part of a negotiation for the person’s services.” A bidding war, then, could lead to preferential treatment for the customer willing to drop the most cash on the service.
The latest moves just cast tipping into more confusing territory. “We’ve been debating tipping for decades, and yet somehow we’ve entered a kind of tipping purgatory in 2023,” wrote Bon Appétit’s Sam Stone in a recent year-end wrapup.
The power struggle between tech companies, restaurants, and now, local governments continues highlight the challenge of balancing the competing priorities — and power imbalances — between these players.
According to research from BentoBox, a restaurant website and marketing service, three-quarters of diners say they would prefer to replace tipping with higher base pay. Here’s one response quoted in the release:
“Establishments should pay their staff a living wage instead of asking patrons to tip.”
What else?
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