Update, July 24, 2019, 11:54 a.m.: On Tuesday evening, DoorDash CEO Tony Xu announced the company will no longer use customer tips to subsidize delivery workers’ base pay. Xu made the statement on Twitter following fierce backlash from customers dismayed that the app was using gratuity to supplement what it promised it would pay workers. “Going forward, 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,” Xu wrote. Slate reached out to DoorDash to ask whether the company plans on retroactively paying drivers back the tips it used to supplement their guaranteed base pay. We will update if we hear back.
The on-demand app economy makes eating easier. No need to leave your house to go to a crowded grocery store, or cook. The food arrives in minutes. Even tipping the delivery person is easier than deciding on a tip amount or scrounging for cash on the spot while she stares at you. Pick a few dollars or choose a percentage—the calculator on the app has done all the math for you. A vegetarian burrito from a nearby taqueria where I live in Oakland, California, cost me $9.15 using DoorDash. The app added on a $1.99 delivery fee (which was waived because it was my first order), plus a $1.01 service fee, plus the option to tip the delivery person $1, $2, $3, not at all, or some custom amount. In total, my lunch came to my door for about $15. This is the perfect app for a Sad Desk Lunch.
You might expect the money I paid as a tip on the app to go directly to the delivery person, just as the cash I handed the pizza delivery driver who came to my door a few days ago would. But it might not. That’s because DoorDash uses my tip money—money I think I’m giving to the delivery person directly—to cover the worker’s base pay, thereby reducing what DoorDash has to pay out of its own coffer. That means if a driver is guaranteed a base pay of at least $5 for delivering your order but the delivery and service fees only add up to $3, the $2 you tip could go toward that guaranteed minimum.
What DoorDash is doing is somewhat similar to a practice that’s been common in restaurants for decades. Federally, tipped minimum wage is $2.13 an hour. If with tips that $2.13 doesn’t add up to minimum wage for that state, the employer is supposed to make up the difference. Whatever a server makes in tips over his minimum wage, he gets to keep. DoorDash uses the customer tip to pay the drivers’ minimum promised pay for each delivery. Imagine if a server at a restaurant was making $4 an hour plus tips but her tips went toward that $4 an hour too. That’s not what a tip is.
My first DoorDash order is probably my last because, as journalist Louise Matsakis put it on Twitter, “I don’t believe that a single person intends to give a tip to a multibillion dollar venture-backed startup. They are trying to tip the person who delivered their order.”
I wanted to know if DoorDash was an industry outlier, so I looked into how other popular delivery apps—Instacart, Caviar, Postmates, Amazon, and Grubhub—handle tips for delivery workers. If you must use DoorDash or another service that subsidizes worker wages with tips, the best thing you can do is be aware of that ahead of time and tip with cash. Hell, you should tip everyone with cash. Companies constantly tweak their terms of service and algorithms, unbeknownst to app delivery workers and customers. Tipping in cash is the only real way to know your gratuity is going in the pocket of the person it’s intended for. And remember, 20 percent is standard, with more if the weather is bad, it’s very late, or the order is large.
Postmates confirmed to Slate that it doesn’t use tips to subsidize delivery workers’ pay. The app prompts customers to include a tip after the delivery is completed and doesn’t allow for new orders to be placed until the customer either tips or dismisses the notification.
Grubhub and Seamless
When you tip using Grubhub or Seamless (which is owned by Grubhub), all of the tip goes to the delivery person, and it’s not used to subsidize workers’ pay, Grubhub confirmed to Slate. Before you complete the order, Grubhub suggests a tip amount that’s based on the total cost of the order, not just the price of the food, which shakes out better for the delivery person. It’s also fair, since customers are not just paying for the food. They’re also paying for it to come to their doors, so the gratuity should apply to the full service.
It wasn’t until February that Instacart stopped counting customer tips toward couriers’ base pay. The change came following outcry from workers and customers when shoppers started sharing stories, like one receipt of getting $10.80 for a job despite receiving a $10 tip. Instacart changed its policy, increased its minimum pay per order, and paid back shoppers who had their tips count toward their base pay. Now all tips to shoppers go directly to the shoppers. Good.
With Instacart, workers don’t only deliver—they usually shop for customers as well, going through your list and grabbing all your specific items off the shelf. It’s a lot of work for each order. The minimum payment for picking orders off shelves is $7 to $10, which isn’t a lot of money by any measure—something to keep in mind when thinking through tipping on your Instacart order.
Caviar delivery workers keep all of their tips, which don’t count toward base pay. With Caviar, couriers are often on bicycles, which can be difficult or even dangerous when you have a pack of food on your back. (Caviar does provide accident insurance coverage for its delivery workers.) Keep that in mind when calculating a tip. Customers have a two-hour window on their accounts to tip after a delivery is completed.
Amazon and Whole Foods Delivery
Amazon’s grocery delivery workers and those who deliver items through Amazon’s Prime Now service, which delivers goods within two hours of placing the order online, can receive tips through the Amazon Flex app. Amazon told Slate that “delivery partners still earn $18-25 per hour, including 100% of tips — and on average drivers earn more than $20 per hour.” But a spokesperson didn’t answer the specific question of whether customer gratuity is counted toward the base pay of its grocery delivery and Prime Now workers. But the Los Angeles Times reported earlier this year that Amazon has a policy that allows it to use tips toward guaranteed driver base pay. In multiple emails to drivers, Amazon said, “We add any supplemental earnings required to meet our commitment that delivery partners earn $18-$25 per hour.” So, even if drivers are receiving all of their tips, those tips might be going toward subsidizing Amazon’s promised base pay.
It’s long been known that the magic of Amazon’s two-day shipping operation for Prime customers relies on poor working conditions for warehouse employees and delivery drivers. So it’s no surprise that the company may be cutting corners with its Prime Now delivery workers, too. If you order Whole Foods delivered to your door from Amazon, tip in cash to ensure that the delivery person is indeed receiving her gratuity.
Uber Eats confirmed to Slate that 100 percent of tips from customers are given to delivery workers on top of whatever they earn for the order. With Uber Eats, tipping happens after the order is delivered.
This piece has also been updated to include a comment by Uber Eats.