DoorDash Changes Tipping Model After Uproar From Customers


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As DoorDash grew to become the biggest on-demand food delivery app in the country, it began doing something unconventional with customers’ tips: It used them mostly to subsidize its payments to delivery workers.

Even as it faced blistering criticism for the policy in February, DoorDash stuck with it.

No longer. DoorDash announced Tuesday night that it was dropping its tipping policy, which had effectively meant customers’ tips were going to DoorDash rather than the person who delivered their meal.

The decision followed another round of outrage and customer complaints about the policy after a New York Times reporter described in an article what it was like to work as a food-app deliveryman.

DoorDash’s reversal comes amid a broader debate about jobs and fair pay in the so-called gig economy, where workers have more flexibility but less stability and fewer benefits.

But 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.

In his Twitter thread last night, Mr. Xu wrote that DoorDash’s average contribution to Dashers did not change after it adopted the tipping policy it is now dropping. Before adopting that policy, the company had paid workers a flat fee per delivery, plus any tip from the customer.

DoorDash says that in its recent surveys of Dashers, they overwhelmingly preferred the current system to the flat-fee model.

“But it’s clear from recent feedback that we didn’t strike the right balance. We thought we were doing the right thing by making Dashers whole when a customer left no tip,” Mr. Xu wrote. DoorDash says customers do not tip 15 percent of the time.

“What we missed was that some customers who did tip would feel like their tip did not matter.”

Counting tips toward a worker’s wages is not a technique invented by tech companies. It is borrowed from the restaurant industry concept of a “tipped wage.” But restaurant employees are covered by minimum-wage laws and laws that limit the amount of tips that can be counted toward those wages.

In New York City, for example, restaurants are allowed to count up to $5 per hour of a worker’s tips toward the minimum wage, which ranges from $13.50 to $15 per hour.

There is no such thing as minimum wage in the piecework world of on-demand delivery.

Because delivery workers for apps are legally considered independent contractors, not employees — they set their own hours and can accept or reject any job, though they have no ability to negotiate rates — they have no wage protections.



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