DoorDash Flip-Flops On Controversial Pay Policy, Says Tips Will Go To Delivery Workers (engadget.com) 235
Yesterday, a New York Times reporter reported on how some delivery apps like DoorDash 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. Following the backlash from that report, as well as others that exposed the controversial pay policy, DoorDash CEO Tony Xu announced his company will change its policy. Engadget reports: Without getting into specifics, which he said will be announced "in the coming days," Xu tweeted that his company misunderstood "that some customers who *did* tip would feel like their tip did not matter." So now, "the new model will ensure that Dashers' earnings will increase by the exact amount a customer tips on every order." Or, the way you probably thought tips worked.
Sorry... (Score:5, Insightful)
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I read it cause someone posted a link to it here. =)
Do not worry (Score:3, Insightful)
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THIS 1,000,000%
How lazy have people gotten that this has become a "service" anyway....
Re:Sorry... (Score:5, Interesting)
How lazy have people gotten that this has become a "service" anyway....
Gen Z or "iGen" (because of their heavy usage of mobile devices) prefers to interact with the world as much via that medium as possible. Now that this generation is large enough, the market segment is considered an opportunity by DoorDash, Uber/Lyft, Shipt and a variety of other services. Your rhetoric just kind of sounds like "old people". I have baby boomer neighbors that begrudgingly use text messages to communicate still muttering and grumbling about "I don't know anything about them there computers". This is just what normally happens as new generations embrace new technology and newer ways of doing things. Having said that, we will make sure to stay off your lawn. :)
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I'm not surprised considering how incompetent some people are that I have to interact with. It is very often so much easier to shop online. Blame my communication skills, if you like, but the moment other people get involved, chances of idiocy happening grows exponentially.
Also if I understood correctly, this is a service that delivers... things... to your house? I'd say not having to use your own time to do it if someone else will do it for a reasonable amount of currency is about the oldest concept in com
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It is because having a thing is more important than getting a thing. e.g. browsing in a bookstore is something that perfectly fits into the YOLO idea. Even if NOT getting a book in the end is the result.
In the same way going to a restaurant is a better way to spend your time than having it delivered
"Well, like, that's just your opinion, maaaaan" -The Dude, The Big Lebowski
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Thank you for such an insightful comment.
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I like spending time with friends and family. Shopping together, however, is not on the list of things that bring me joy. Lets spend 5 minutes getting the thing I want ordered online and the rest of the hour we would have spent doing it in person we can instead use to do something we enjoy together. Some days I get food delivered to the house or office. The time we would have spent driving, waiting then driving back is instead spent on things we enjoy more.
Having options, paying for them, is a way to maximi
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"Walk in a store and experience what you are buying. Look at it. Talk to the salesperson who has no clue. Interact with people instead of your screen."
The latter of those is usually the only thing I can do locally, because the store doesn't carry what I want to buy. Talking to a badly programmed sales droid is one of the levels of hell, so fuck that twice. It's time for retail to die, and for the most part, it is doing that.
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e.g. browsing in a bookstore is something that perfectly fits into the YOLO idea.
But browsing a car parts store, a grocery store, or the local Wlamart/Target doesn't do anything for me and because of the people there (nothing specifically against them, it's just unpleasant with that many people) so therefore I would prefer to spend my time at home. If your YOLO is experiencing the touch/feel/smell/people in the book store, I get it, that makes sense.
In the same way going to a restaurant is a better way to spend your time than having it delivered.
Same thing applies for this. If you don't enjoy the "Restaurant Experience" and don't want to cook that day, getting something other than
Eating out with kids... (Score:2)
*Fortunately, there are many activiti
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I'm not surprised considering how incompetent some people are that I have to interact with. It is very often so much easier to shop online. Blame my communication skills, if you like, but the moment other people get involved, chances of idiocy happening grows exponentially.
Nailed it. I just set up a Dr. appointment. It took 15 minutes and talking to 3 different people that went something like this: "Oh, this is a return visit, we only schedule new appointments.", "Oh, we don't normally schedule for that Dr. Let me transfer you to his office.", "Why are you calling here again, that other office handles their scheduling." Meanwhile, I have a screen open on my computer that literally says my Dr is available at 3:40 today at this clinic, would you like to schedule it?
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So what else?
You have to accept that for any service to happen, the service provider will rely on computers. And that's from a telco to any Pizza delivery. (Even in the smallest pizza shop, your order has to show up in the electronic ledger in the end or IRS will rip yo a new one...)
So somehow your order has to go to the service providers computer - and the easiest and most robust way to do that is to have your computer talk to their computer. Especially as nowadays everyone has a computer in their pocket.
It wasn't GenZ or the millenials (Score:4, Interesting)
This isn't new. Delivery of food is something that was popularized during WWII in the UK, and spread back with returning GIs. Food delivery services are literally as old as, and have the same cause as, the boomers. The idea of ringing the store and getting delivery or a milkman seem very 1950's. The idea of ordering Chinese or Pizza is seen in sitcoms written by boomers with tropes from their youth (Friends, Seinfeld). It was before GenZ was born that pizza delivery finally went nationwide as opposed to being in cities.
That these services are more prevalent has to do with macroeconomic issues (there aren't better jobs available) and increased urbanization/density. And the clever idea of having delivery logistics companies take over delivery for mom-and-pop restaurants who cannot set up their own service.
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Boomer tropes from their youth (Seinfeld, Friends)? You mean weird new sitcoms about self-absorbed kids?
It tell you what, Gilligan could only have just dreamed of people bringing pizza to the island..
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Gilligan was what boomers watched. Friends and Seinfeld are what boomers made based on their life experiences. It's why all the "kids" are self-absorbed like the boomers are. It's why NYC was so cheap to live in. And it's why delivery is so ubiquitous.
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Gen Z or "iGen" (because of their heavy usage of mobile devices) prefers to interact with the world as much via that medium as possible.
You want to believe that, I'm sure. The fact is, people who didn't fully develop would rather stare at a screen from the confines of an 'insulated safe space' than get out there and actually have to make eye contact... and yes, that tends to be even more prevalent among your generation than any before. But don't fool yourself; a far tinier percentage of you dumb shits even know how those devices work.
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What happened to Gen Y? Is that a Millennial? Why did the counting start at X? Will the next generation wrap around and be gen A?
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My wife and I decided to give DoorDash a try after we brought home our first child. While theoretically I could've gone out and picked up food, in practice it was oftentimes difficult to do so, if for no other reason than that no matter what state they were in when I departed, I could pretty much always count on both mother and child being in tears by the time I got home due to the emotional roller coaster that happens in those first few weeks postpartum. It just wasn't worth it to me to pick up food if it
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No... rather:
OK, so we'll drop the policy of topping up tips below minimum wage to minimum wage level. Or to paraphrase the summary: We're back to "or the way you probably thought working for tips only worked"
The problem is not a company taking away tips. The problem is that
a) Hiring someone for tips only is still legal (using the loophole that the employer has to make up an eventual difference between tips received and minimum wage - which is exactly what happend here)
b) it has not been communicated that d
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Trying to call it 'controversial' is not helping their image. No-one is fooled.
Doordash driver here disagrees (Score:2)
While between jobs, I drove for Doordash because I'm the kind of guy who can't just sit there and not work.
While I absolutely understand why some people would have a problem with the old policy, there is also another side to it. The old policy had an important benefit for drivers.
Consider this policy:
When the customer is stingy and doesn't bother to tip, Doordash will provide a tip. Sounds like a good idea, right? That's the exact same policy, put in different words.
A significant number of customers don'
Re:This is why "apps" suck. (Score:4)
It's just like the scam a lot of restaurants have been running for years when you pay on a card and the machine asks if you want to tip as well. That "tip" may or may not be going to the staff you intended, and if it does, they may or may not receive all of it. I always prefer to tip in cash in this sort of place, directly into the hand of whoever provided the good service.
However, then you get another problem, where sometimes the kitchen staff are also underpaid and topped up by tips through the company system (which makes little sense if you think about what a "service charge" is supposed to represent). So if you tip your waiting staff personally for good service, the kitchen staff who made your meal might be "losing out".
So for that reason, if there is a system in place where the staff have agreed to share tips, I'm OK with using it, as long as it's clear that it's the staff who are choosing where their tip money goes.
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Either way you're trusting someone to share money with someone else. If you tip electronically it's the automated process, if you tip in cash you're depending on the honesty of one person to report the tip accurately and share the cash when there's no real oversight.
Re:This is why "apps" suck. (Score:5, Insightful)
True, but in one case you're trusting a hardworking employee to share with their hardworking coworkers, reinforced through peer pressure (one of the strongest motivating forces there is). And if they do cheat, your money still at least goes to the original employee.
In the other you're trusting corporate policy, executive decisions, and accountants to honor your non-binding intent, despite the fact that it cuts into profits.
I know which one I'd rather trust.
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Personally, I'd trust the automated system that was built to comply with applicable laws, and which the proprietor knows will get them sued into oblivion if it doesn't work, over one person stuffing bills into their pocket. YMMV
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And if they do cheat, your money still at least goes to the original employee.
Not necessarily. If you leave a cash tip for your waitress, the person who gets it may be the guy who clears the tables.
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I grew up working in restaurants from High School through Grad school. I started washing dishes, the busboy, waiter and bartender.
Trust me, if a busboy is snagging tips. that does NOT last long.
It depends on the level of restaurant you are in, but your basic family chain one, the waiter gets the tips...the collect the cash ones on the table, and when they check out at the end of the shi
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Locally, many places hate DoorDash because the menus on their website are often out of date, and don't apprise customers of specials that are running (leading to people paying full price on top of the delivery fees).
But an even greater problem is the slowness of delivery. Customers who receive cold food or meals that are damaged perceive themselves as having had a bad experience with the restaurant, when really it was the DoorDash platform (or Bite Squad, or Uber Eats, etc.) that's the problem. And many of
The system is the problem (Score:5, Insightful)
Why not abandon the whole tipping culture? It's an idiotic system to begin with, favoring the owners and screwing over the employees. Why not demand an appropriate wage for the work? With today's culture being all about "support" and "sending positive vibes", wouldn't it be the perfect time to launch a restaurant where you aren't allowed to tip, the employees get paid a respectable wage, and everything is all very honorable and direct? Maybe even include paid vacation and maternity leave for the more serious positions? Wouldn't today's Twitter crowd be happy to pay for such honorable processes?
Re:The system is the problem (Score:5, Insightful)
Agreed, make employers pay a living wage and this tipping nonsense can die off finally
Re:The system is the problem (Score:4, Interesting)
Since minimum wage was instituted, even for restaurant workers I've stopped tipping. Cold turkey. Any restaurant works here, feel free to complain to your hearts content but it is the profession you have chosen.
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Restaurant owners love complaining about how it would increase prices and drive away customers
It will. The cost of "eating out" has gone up quite a bit over the past 10 years without even this change. As a result, I don't eat out nearly as much as I used to, opting to cook at home. So yes, people like me will opt to eat out less or not eat out altogether. The problem in a USA is that our take home pay is getting eaten away by higher taxes, home/rent prices, CPI inflation, healthcare costs, wage stagnation and a variety of other things. Until improvements can be made to those types of structural
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Probably a good thing, if you're saying you currently refuse to tip when you go to restaurants.
Not quite sure how you extrapolated that from their comment.
If you're not saying that, then maybe you can explain why you'd refuse to go to restaurants if you end up paying less?
Again, not sure how you got that out of the prior comment. The comment is literally "Paying a higher wage and eliminating tipping will cause prices to rise, and drive away customers." And "The cost of going out is already too high." Where in those two comments is the price of eating out implied to go down? I guess if the prices "only" go up by 15% and you normally tip 20%, it makes sense.
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The difference is minimal, and prevents the waitstaff from being at the mercy of the diners.
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Depends on what you consider minimal? Do you really think that the employer is going to subsidize 15% drop in revenue? I guarantee if I was still in the industry and my employer switched from a tipped to a non-tipped environment I'd expect to be making the same as I was prior to the change.
I served beer for a while with my wife, our "pay" was $40/night and as a team we pulled in ~$200 in tips in 4 hours. We would pour around 200-250 beers in that time. If we eliminated tipping I would expect that we be
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According to your own figures, you were making about $1 per beer poured, including (mostly) tips. For your example of a $4 beer, that implies an approximate tip of $1 per beer. So, what difference does it make to me if the beer is $4 + a $1 tip, or $5 with no tip? If $1/beer is an excessive marginal cost to me, I should probably just be buying my beer at the grocer's for approx. $2 each and not visiting bars at all.
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The problem is you didn't explain the math on the employer side. You just inserted an arbitrary number, you forgot, among other things:
- Lease money
- Utilities
- Payroll taxes
- Cost of materials (sorry, they're not free)
And probably many other things. You think making a meal doesn't cost anything at all and the just POOF, there is easy and the so-called evil employer is pocket the difference. If you can't account for every dime spent in business, you shouldn't run a business. It can be done and is do
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The problem is you didn't explain the math on the employer side. You just inserted an arbitrary number, you forgot, among other things:
- Lease money
- Utilities
- Cost of materials
Those are all accounted for in the $48 in either system since neither is related to how the employees get paid.
- Payroll taxes
This is the only difference, and only because you assume there is no payroll taxes on the tips, which is a form of tax evasion (and you're probably expecting, rightly, the employees to not pay income taxes on the tips either which it too is tax evasion).
You think making a meal doesn't cost anything at all and the just POOF, there is easy and the so-called evil employer is pocket the difference. If you can't account for every dime spent in business, you shouldn't run a business. It can be done and is done all the time. Claiming it isn't possible is laughable.
Wow. Tilting at windmills much? You should get out, take a walk and come back once you've cooled down a bit.
Re:The system is the problem (Score:5, Insightful)
Why not abandon the whole tipping culture? It's an idiotic system to begin with
While that's entirely debatable, it has fuck-all to do with employers stealing from their workers.
You wouldn't be trying to change the subject, per chance?
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No, employers are exploiting an opportunity that dysfunctional tipping culture creates.
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Why not abandon the whole tipping culture? It's an idiotic system to begin with
While that's entirely debatable, it has fuck-all to do with employers stealing from their workers.
You really don't see how the two are related? Here's a big hint: if there is no tip there is nothing for the employers to steal.
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This assumes that your tips are not your base pay.
What we have here is someone working for tips only, and the employer only steps in to cover a difference between tips and a guaranteed minimum wage.
And complain as you may, but expecting someone to work for tips only IS a problem with the current tipping culture. Or a loophole in the minimum wage laws, if they ever were supposed to stop working for tips.
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This assumes that your tips are not your base pay.
This assumes that the respondent cares about what anyone else is making.
They don't.
They only want what they want as cheaply as possible, fuck everyone else and damn the consequences.
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Re: The system is the problem (Score:2)
Adding taxes produces its own issues in price labelling. If McDonald's has a dollar menu, it would be ridiculous for them to need to produce marketing materials in hundred or more varieties to cover all the different tax jurisdictions they operate in. The price is the price. If you want sales tax included, go somewhere there's no sales tax, like Montana.
Re: The system is the problem (Score:2)
So, then you have no idea how much you're paying in taxes?
Re: The system is the problem (Score:2)
Also, not just Americans. Canadians have the same system. Mexico is transitioning away from it, but it's still found in some businesses there, too.
Tax jurisdictions like to compete on tax rates. I feel like when tax is included, you go from tax jurisdiction to tax jurisdiction throughout your day and you lose sight of whether you're paying more because the store is charging more or because the taxes are higher.
Re: The system is the problem (Score:2)
Oh, and also, what if you are a merchant and you don't have to pay sales tax? For example, that used to be almost Cost Co's entire business. Do you include the tax in the price and then discount it at the register?
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Oh, and also, what if you are a merchant and you don't have to pay sales tax? For example, that used to be almost Cost Co's entire business. Do you include the tax in the price and then discount it at the register?
The way it works is that everyone pays the VAT and then businesses deduct the VAT they paid from the VAT they received when selling their goods / services and settle the difference with the IRS at the end of the quarter or year.
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Sure: it's 10% on food (and the receipt breaks it out anyway). But frankly, I care how much I'm paying in total, not what the division is between how much goes to the government and how much goes to corporate profits.
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It is as if these people do not understand that no [tip] means no [tip], no matter how small the tip is you give.
No. It means the tip is just a tip and not the only way for the waiter to make ends meet. So in Europe not leaving a tip is ok whereas in the USA it's theoretically ok but a big no no in practice.
Re:The system is the problem (Score:5, Insightful)
Growing up in the 1970's many families including my own would go to Bishops Buffet after church. There'd always be a line because it was a great place to eat.
+ Walk through a line like in a cafeteria.
+ Multiple people would be ready for you at the end of the line to take your tray.
+ A host would escort all of you to your table. (Even pulling the chairs out for the ladies.)
+ Need something? Each table had a little battery operated candle. Turn it on and someone would come over and help you.
But at the beginning of all of this was a very polite sign (which looked like it was from the 1950's) stating, "As part of our company policy, please no tipping."
Everyone seemed very happy with no tipping.
Then K-Mart bought them out. You still walked through the line as usual. But...
+ No host or tray carriers. You took your own tray and had to make do with finding your own table.
+ No candles on the table. Get up and get your own refill, lazy ass.
And the 'please no tipping' sign was gone. As was the contented, busy little bees which gave the place a warmth. They were replaced by the standard, "Hi" and "Bye" type of employee. Not rude, just content on cleaning a table, picking up a tip, and then disappearing to wherever until another table needed to be cleaned. I knew people who worked there during their high school years and they gave me that what's-what. They said salaries went from...
25% above minimum wage - to - below minimum wage + tips
Tips which only went to the people cleaning the tables. Be honest, how many people do you think actually leave a tip for a service done 'after' they leave? Not many.
Bishops went from a clean, efficient place which made you feel very upper-middle class to just another generic all-you-can-eat. :(
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Yes, originally they were individual prices. But after K-Mart bought them they changed it to all-you-can-eat. They also closed down the grills. They used to make burgers and steaks per order.
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and then they told people after 4 hours YOU GO NOW!
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Why not abandon the whole tipping culture?
The original purpose of tipping still makes sense. The whole point was to provide the employee with incentive to do their job well and deliver good customer service. The manager of the service area can't oversee every single person to ensure they are providing quality customer service and the only way they could become aware that they weren't is by complaints. This way is more straightforward and I believe still applicable even though it's quite an old way of doing things.
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The incentive to do their job well is their paycheck.
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This explains why cultures with no tipping have lousy service... except that doesn't actually happen. I get better service in Switzerland than in Germany, and I find service in Japan to be almost painfully attentive and they are grievously offended if you try to tip them.
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The one thing that tipping actually incentivizes is getting your best workers to work the busiest times. For many jobs one hour in one shift is much like another, so they pay the same wage each hour. There are some cases where a particular shift is less desirable so a higher wage is needed to get people to fill it. Then there are cases like a restaurant where the workload can vary wildly by hour and day. If every hour pays the same then the experienced worker would be able to shop around to get the lowest w
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It doesn't make sense for two reasons:
Overseeing your staff is your job as a manager. Don't make me pay tips to do your job. Even if you consider tips as a valid feedback on service quality: Good feedback will stay in one service persons pocket and you (nor the IRS...) will ever hear from it.
Secondly, the waiter (or housekeeping whoever is the actual person getting the tip) is only a small part of my restaurant/hotel/bar experience. By your logic, I would also have to tip the cook if my medium rare steak is
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Can I support this by hitting a "like" or "share" button? I'll absolutely support that idea unless of course that will make it more expens.... what? forget it!
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The tip-based model of employee compensation is all about profit-sharing. When the business is having a busy day, the workers are being rewarded very handily thanks to the tips, but when the day is slow, the tips are slow too. With a fixed pay, the workers may experience a degree of security, but at the same time there will be no rewards on a day when the business is booming
Re:The system is the problem (Score:5, Informative)
Because if you raise prices to give raises for the waitstaff to make up for it, the additional part also becomes subject to sales tax and FICA. For example, assuming 10% sales tax and 20% tipping rate (just to make my math easier):
Current: $20 meal for the restaurant + $2 sales tax + $4 cash left on the table for the waitstaff = $26 cost
Proposed: $24 meal, 20 for the restaurant, 4 for the waitstaff wages + $2.40 State sales tax = $26.40 cost
After 6% FICA: $19.75 for the restaurant, $3.75 for the waiter, $.50 for our benevolent leaders in DC
So after the adjustment, the customer pays $.40 more and both the restaurant and the waiter are down $.25. You can of course spread the cost how you want -- charge the customer $1 more, have the restaurant eat it.
Or to put it another way, a no-tip restaurant is at a ~5% tax disadvantage with respect to an otherwise-identical with-tip restaurant. Over time, you'll just stop seeing the former -- indeed a few experiments just stopped. The tax disadvantage here is more than the net profit margin, especially at a full-service place where wages are 30-40% of the cost.
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Yeah, but that one's on the original inventor of the system. I don't think government ever intended restaurants to have a tax-free payment model. The fact that it has been for some time, and that current restaurant finances have grown accustomed to not paying taxes on employee salaries, is not an excuse for continuing what is by the book tax evasion. If restaurants can't survive without tax subsidies, that is a separate problem (that should probably be attended to at the same time). All businesses should pa
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It is not tax evasion. The State laws that create/define sales taxes explicitly make discretionary tips or gratuities are not taxable. For example, according to California Pub 115 [ca.gov], an "optional payment designated as a tip, gratuity, or service charge is not subject to tax".
If CA wants to change their tax law, they are entitled to do so. But please don't call it "breaking the law" when the law is very clear about what is/isn't taxable. Maybe it ought to be a different law, but that's not what the law is.
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1. Any discretionary tip qualifies, regardless of quantity
2. Separately
3. Yes, a customer is perfectly free to get up and walk out without leaving a tip
On what basis? The CA legislature is well aware of the current state affairs and has pointedly not revisited the statute in decades. There has not even been a committee hearing to consider changes. On this factual basis, I am fairly confident that they are
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Dude, the question was "what if the tip was included in the base price".
Yes, you are correct sales tax is not on tip. But it is on the subtotal. So moving it from tip --> subtotal means a net change in the taxable total.
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Tipping is a trap. We would all be better off if prices and salaries accurately reflected the expected costs, and no-one tipped at all. However, if everyone tips, then workers have an expectation of tips, and if you are the only one not to tip, then a particular worker is unfairly deprived of income that was implicit in their employment.
So, who wants to go first in trying to eliminate tipping?
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I base this on many years working in the food
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An actual increase in wages would be reported on an employee's W-2. Meanwhile, I wonder how often tips actually are. Its possible that a large portion of tips are under-the-table income, and compensating for their removal would require a significantly higher wage increase than employers are willing to make.
Comment removed (Score:5, Insightful)
In other words . . . . (Score:5, Funny)
"We thought our customers were tipping the company for the great idea we had in college. My bad."
Too Late (Score:2)
Tip in cash (Score:3)
Adding the tip to the total on the credit card makes it hard to know where that money goes to.
If you care about where the tip goes, always tip in cash.
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TIPS = To Insure Prompt Service (Score:3, Informative)
"People noticed we were stealing money..." (Score:3)
"... so I guess we won't any more. So, everything's cool now, right?"
Oh, they'll find another way (Score:2)
Could be a sleight of hand (Score:2)
Unless they release their whole policy and make a binding promise for no further or publishing any further changes,
then we don't really know, now do we?
So now, "the new model will ensure that Dashers' earnings will increase by the exact amount a customer tips on every order." Or, the way you probably thought tips worked.
So they could have achieved that by replacing their "minimum earning" per order at the time of filling the order into a
"minimum earning (including tips) per pay period" ----- just ch