DoorDash Still Pockets Workers' Tips Almost a Month After It Promised To Stop (vox.com) 81
DoorDash, the leading food delivery app in the U.S., is still pocketing workers' tips, despite announcing last month that it would stop the practice and change its tipping policies. The announcement was made after a report from The New York Times highlighted how the company uses tips to make up the worker's base pay -- essentially stealing the money you're trying to give someone to maximize their profits. Vox reports: At the time, CEO Tony Xu announced in a series of tweets that DoorDash would institute a new model to ensure workers' earnings would "increase by the exact amount a customer tips on every order." Xu promised to provide "specific details in the coming days." The next day, Xu sent out a note to DoorDash workers, broadly outlining changes and letting them know âoewhat to expect in the days ahead."
But 27 days later, current DoorDash workers tell Recode that the company's pay and tipping policies have stayed the same. The company has not made any public statements about its worker pay and how it plans to institute the changes, nor has it offered a specific date when it will fulfill its promise. A spokesperson declined to comment about the company's plans to change its tipping policy. Soon after DoorDash's years-long tipping scheme was mentioned in the NYT's report, a class-action lawsuit was filed against the company for misleading its customers about how their tips were used. The lawsuit, filed at the end of July, claims that DoorDash failed to make clear to its customers that tips they gave through its app to couriers were not being allocated as they were intended to be, and that had customers known this, they would not have tipped through the app.
But 27 days later, current DoorDash workers tell Recode that the company's pay and tipping policies have stayed the same. The company has not made any public statements about its worker pay and how it plans to institute the changes, nor has it offered a specific date when it will fulfill its promise. A spokesperson declined to comment about the company's plans to change its tipping policy. Soon after DoorDash's years-long tipping scheme was mentioned in the NYT's report, a class-action lawsuit was filed against the company for misleading its customers about how their tips were used. The lawsuit, filed at the end of July, claims that DoorDash failed to make clear to its customers that tips they gave through its app to couriers were not being allocated as they were intended to be, and that had customers known this, they would not have tipped through the app.
Legality (Score:3)
Re:Legality (Score:5, Interesting)
The part that's different is they actually advertise that this tip goes 100% to the driver. They argue that this is technically true -- 100% of your tip goes to the driver, and *exactly* that much less goes from doordash to the driver. However, that's clearly misleading bullshit and I'd argue it's not even technically true: money is fungible and the credit card payment I made went to Doordash. If Doordash gives their driver exactly the same amount of money as if I hadn't tipped, then there is no sense at all in which the tip went to the driver.
If Doordash said "the driver sees probably $0 of this money", which is literally true, then it would be a more honest arrangement -- and they'd likely get a lot less of those tips.
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If I tried that trick with the IRS, I think they'd throw me in prison.
False (Score:5, Insightful)
What you claim simply is not true. To understand what isngoing on, it is first helpful to understand something else. There are two major groups of Doordash customers. Many don't tip, many tip appropriately ($3-$6). Very few bother to do a very small tip, such as $1.
> 100% of your tip goes to the driver, and *exactly* that much less goes from doordash to the driver.
False. When I did Doordash for a short time between jobs, your claim was never true for any my deliveries.
Essentially, Doordash guarantees a small tip. A fairly large percentage of customers don't tip at all. In those cases, Doordash kicks in a little bit. Let's assume it's $1 for an example delivery. Doordash guarantees the driver that they'll make at least $6, a tip of at least $1 plus $5 from Doordash.
If the customer tips, it's typically something like $3, so the driver would get $3 tip and $5 from Doordash, for a total of $8. They were guaranteed AT LEAST $1 tip, they ended up getting a $3 tip. They got $2 more than the guaranteed amount. A decent tip increases the earnings of the driver.
The ONLY way that not tipping is equal to tipping is if you do a really crappy tip of less than $1. If you tip less than $1, Doordash makes up for your stinginess.
I'm glad they do, because one annoying thing about deliveries is you never know whether you'll get a tipper or a non-tipper, meaning earnings can double or be halved by random luck. Doordash evens out this somewhat by guaranteeing that of the customer doesn't tip (or tips less than $1), Doordash will throw you an extra dollar.
Drivers aren't thinking clearly when they complain about this. Doordash will just pay $5 or $5.50, less than they currently pay. Then 100% of the risk of non-tippers falls on the driver. Dumb move, complaining drivers.
> The part that's different is they actually advertise that this tip goes 100% to the driver.
Citation needed.
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You are incorrect.
In your example DoorDash guarantees 6 dollar for the driver. if the customer does not tip DoorDash pays 6 dollars. 5 dollar +1 dollar tip.
If the customer pays 3 dollar tip than doordash pays 6 dollar. 3 Dollar +3 dollar tip.
Basically yes all of the tip is going to the driver but increasing the amount of the tip does not change the Drivers take home. it improves DoorDash margins.
Instead do what I do. Tip 0 in the app and then tip 3 dollar in cash. The Driver gets 6 dollar from Doordash and
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You are incorrect.
In your example DoorDash guarantees 6 dollar for the driver. if the customer does not tip DoorDash pays 6 dollars. 5 dollar +1 dollar tip.
If the customer pays 3 dollar tip than doordash pays 6 dollar. 3 Dollar +3 dollar tip.
That's BS in both postings. Any money paid by the employer is not a tip.
This whole "scandal" is less a problem with doordash as more a problem of a society that confuses tips with a wage.
An experiment could be useful (Score:3)
An experiment to test a couple different tips might be useful. I researched it a bit more. It appears that unlike Postmates, Doordash sometimes pays as little as $1, depending on the distance, etc.
> The only way the current system works better for drivers is in the case where the customer say tips 7 dollars in the app then the driver gets 7 dollars and Doordash pays out nothing.
THAT doesn't happen, according to my research. Doordash always pays *something*, and it could be a small amount.
If you have a
Re:Legality (Score:4, Insightful)
I doubt it is legal here either, but a lot of crimes related to false advertising and fraud, especially whenever software is involved in the consumer end of the business transaction in some way, seem to go unpunished due to lack of law enforcement's own knowledge of the laws or awareness of the software itself.
Of course they do (Score:5, Insightful)
Remember, they're bleeding cash like crazy, just like Uber and Lyft are, so the only way they can pad the senior exec pay is to rip off the workers.
Welcome to 2019.
Now stop using all these "shared economy" services that are really employee rip offs.
Re:Of course they do (Score:4, Informative)
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Yep, every day they buy a $5 cup of coffee, they always have the latest iGadget and every other trendy thing, yet they're broke all the time and somehow it is the fault of everyone but themselves.
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The number one cause of bankruptcies in the United States has historically been overwhelming bills from unexpected illness. Other top causes include job loss, divorce, unexpected expenses, credit debt (which is somewhat lower on the list). https://www.debt.org/bankruptc... [debt.org]
It is fun to blame lifestyle, and certainly lifestyle can be problematic for financial health, but the big issue is the lack of a good safety net for unexpected illnesses.
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You had a point up until you blamed the liberals. Political leaning has little bearing on personal responsibility.
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Re: Of course they do (Score:3)
The reason it works that way in the USA is because it shows a person is responsible. Itâ(TM)s not uncommon in the USA to also have to close a credit card to be able to mortgage a house but having a credit line and not maxing out and making payments on time shows that you are a responsible person. If you have no credit history, there is a higher risk you will immediately max out your credit card and default so someone with no credit starts out lower than someone with a history of paying their debts.
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The number one expenses are housing, medical care, and other insurance. Everything else in my budget is a fraction of these costs.
I live in the midwest and make it on a single salary (high earner) with 7 dependents, so don't act like I don't know how to budget. The problem is most people spend a decade in the hole and then have to climb out during their prime earning years.
They aren't in the hole because they're wasteful, 9/10 of the time it's because jobs don't pay enough, family doe
Elitists like you are why gulags were invented (Score:2)
Oh, do fuck off, sir. Poor people aren't poor because they buy a pack of cigarettes on their way to work or a case of beer at the end of the week. They do that to feel like actual human beings and pretend their life isn't shit thanks to econ
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Thing is, most of our measures for the health of the economy have anything to do with "most regular people"
Pretty much everything focuses on GDP and similar collective measures, so that a net wealth transfer from most people to the wealthy still shows up as a healthy economy so long as total wealth is increasing - even though most people's wealth is decreasing.
There are a few measurement that take a slightly wider look at society - unemployment figures for example look at the bottom rungs, but even those ar
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"very low unemployment "
If we force everyone to work two shitty jobs maybe we can make unemployment go negative.
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Never used them to start with.
Why pay extra to be lazy and turn into Wall-E's version of humanity?
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Exactly.
Heck, you know how much these delivery companies charge restaurants? About 30%. Yes, 30% of the price you pay goes to the delivery company. And that doesn't include tips, delivery charges or other things.
And it's pretty standard across the services, so yo
Drivers with their hand out again (Score:5, Funny)
I don't know... I feel strongly that many people were hoping some/most of that tip goes to DoorDash instead of the needy delivery drivers.
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Those drivers should make their own delivery service! With blackjack, and hookers!
Jira backlog (Score:3, Funny)
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Simple solution - Tip with cash (Score:4, Insightful)
Yes, it's ore trouble but at least, you know where the tip will go. If enough people stop tipping using the app, upper management might clue in and realize that their greediness has been exposed and needs to stop.
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Yep. That's what I've switched to. I try not to order delivery, but when I do, I now put in comments, "$5 cash tip at door because DoorDash cannot be trusted." Prior to this, it was rare for me to have cash on hand. I broke a couple twenties just for this reason.
Blah (Score:3)
Cash (Score:2)
Two solutions: (Score:4, Interesting)
1) Tip in cash. Everywhere. Restaurants, Cabs, Deliveries... whatever. It's the only way to be sure your money is going where you think.
2) Every once in a while, lets just kill a few a few of these shifty CEOs. Make it gruesome & public; put some real fear into the rest of these psychopaths.
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Re: Two solutions: (Score:2)
The most likely response to tipping in cash en mass is to require the driver to report tips earned to the employer to "square up" on the guarantee and to account for
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>Tipping in cash often ends up being "under the table"
That's up to the recipient. They're required by law to report that income, and if they don't then they're the one that bears most of the consequences (e.g. lower social security and disability payments, etc). That's their problem, not mine. My tip being pocketed by their employer rather than them? That's a theft of my goodwill, and I can fix at least that much.
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"That's up to the recipient. They're required by law to report that income, and if they don't then they're the one that bears most of the consequences"
Those 2 sentences don't add up. Either its optional or they are required to.
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Because people have no choice but to obey the law, right? I assume you scrupulously tally up the sales tax you owe on every internet purchase and deliver them to your local tax collector, as required by law? But free will does not imply freedom from consequences.
Re: Two solutions: (Score:2)
Social Security is not something younger people actively think about. And money management skills are harder to develop when you have less money to experiment with.
Given that the tip guarantee is $6, I would consider that $6 tip a minimum threshold for continued employment. $6 is steep for fast food for which I only eat to avoid paying a tip ($6 meals, 100% tip!), and the only place I've seen door
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>Your goodwill can backfire
Given that it's a choice between them quite possibly never seeing the money at all, or them not collecting social benefits that they would only have gotten if their employer was actually passing the tips along in the first place, I'm not seeing a whole lot of "backfire" potential.
I'm also not overly inclined to police people "for their own good" - in my experience it's very rare that anyone trying to impose their idea of good on someone else has any actual concern for their wel
Re: Two solutions: (Score:2)
Furthermore, as I understand it from a family member who was a waitress last century, and is now on disability, tips were not regularly reported to the employer at that time. There did not seem to be a guarantee of the full minimum wage of $7.25 iirc, over the minimum tip wage, which i
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Re: Two solutions: (Score:1)
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Re: Two solutions: (Score:2)
Using a credit card, I get rewards worth at least 1% of my spend. Yes, the credit card company might be charging 3% but I donâ(TM)t get a discount for paying in cash. I actually get a defacto discount for paying with a credit card. For places that give a cash discount, I always pay in cash. Target has a special store card that gives you a 5% discount for bypassing the credit card companies. My barber also gives a cash discount. I know at one time the credit card companies disallowed this, not s
Re: Two solutions: (Score:1)
The 2-3% comes from retailer, very few stores offer cash discount.
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Not how it works. (Score:2)
Mastercard and visa collect a processing fee from the merchant. Most people with good credit can get part of that fee as a kickback.
4.5 to 20% back on dining and travel
6% back on groceries
5% back on amazon and aws
5% back on lyft
3% back at gas stations
2% back at pharmacies
and 1.5% back everywhere else.
Plus I'm usually signing up for new cards and they all come with some sort of sign up bonus worth $300 - $1000
It's really nice to be sitting on enough airline miles that I can fly just about anywhere I need in
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1) Tip in cash. Everywhere. Restaurants, Cabs, Deliveries... whatever. It's the only way to be sure your money is going where you think.
as in the recipients taxable income?
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Every once in a while, lets just kill a few a few of these shifty CEOs. Make it gruesome & public; put some real fear into the rest of these psychopaths.
I'm not saying this per se... just that we've clearly tried everything else. ;)
Tipping needs to end (Score:4)
If you are employed by a restaurant, that restaurant should be paying your wages. I'm not going to be paying separately for the building, the owner, the cook, the lamps, the tables, the ingredients - so why would I pay separately for the waiter? I'm also not quite sure why the person who carried my food for a dozen meters should get anything more than, say, the person who actually prepared it - and who typically never sees any tips.
End tipping. Pay waiters a normal salary, include that in the price of the food, and be done with the BS custom of separating their salary out from everything else.
https://www.youtube.com/watch?... [youtube.com]
Re: (Score:1, Troll)
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You're an idiot. Seriously. I know several people who are waiters/waitresses at high end restaurants and on the weekend they can easily collect $300-$500 a night in tips. I'm pretty goddamn sure they'd think your idea sucks.
That's nice for them, but I guess the drivers complaining here don't make $300 to $500 per shift.
asshat
cool new way to add credibility to your argument. Nice pointer for those who haven't realized who the real idiot is here.
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It sounds like those restaurants can afford to charge more for their food if their waiters are getting $300+ a night in tips. No one's saying wait staff's take-home pay should be reduced... just that their pay should be predictable and that the source of their pay (customer payment) not be subjective.
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Tips are a reward for doing more than the bare minimum required to keep your job.
I go above an beyond at my job on a regular basis, but I'm not tipped for it and I don't expect to be. Why have we as a society decided that only waitstaff and a few other professions are deserving of tips, while everyone else just has to do their damn job and be happy with a static paycheck? A far as I'm concerned, being attentive to your customers, getting the order right, and bringing it out to them IS their job. Why are we supposed to be obligated to tip for that? The restaurants should just pay them at
Re: Tipping needs to end (Score:2)
Most people tip the same regardless. I tip between 15% and 20%. Closer to 15% for average service and closer to 20% or sometimes higher for good service. At a minimum, it should instead be 0% for average and 5% for good. I would much prefer tipping to just go away and let me give a star rating at the end of the meal and let the employer give tips/bonuses as they feel fit. This also helps eliminate the cheapskates that donâ(TM)t tip.
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I absolutely agree that this working for tips only is the main problem here and should be ended, but I still have an answer to your rhetorical question:
If you are employed by a restaurant, that restaurant should be paying your wages. I'm not going to be paying separately for the building, the owner, the cook, the lamps, the tables, the ingredients - so why would I pay separately for the waiter? I'm also not quite sure why the person who carried my food for a dozen meters should get anything more than, say, the person who actually prepared it - and who typically never sees any tips.
As most restaurants belong to chains that has to follow franchise required procedures to prepare franchise provided ingredients - carrying your food for a dozen meters is probably more of an individual service than preparing your food by heating up what came in the truck from headquarters.
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THIS.
Tipping as a replacement for wages (most waitstaff makes a lot less than minimum wage because management says "they get tips") is an abomination.
Yet another scummy tech scam... (Score:2)
What I don't understand is how these companies exist? They bleed cash (steeling their employees' tips can't actually help much with that). They will never, ever be profitable - it's simply not possible, given their business model. The same can be said of so many Silicon Valley businesses, many of which are "valued" in the $billions.
Why, exactly, do investors put their cash into companies that are doomed? Is it simple a ponzi scheme, with each investor hoping to sell out to the next sucker before the game co
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Because in the short term they can make a quick buck regardless of the suffering they cause and have no legal responsibility for the actions of these companies they own part of.
First big change needed, hold the board of directoors, CEOs, and the stockholders legally and financially responsible when a company breaks the law/gets fined
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I'd say it's part Ponzi scheme, part reality distortion field. The reality distortion field is being generated by companies like Amazon, Google and Facebook; people delude themselves that they're getting in on the ground floor on the next one of those.
Why is this not theft? (Score:1)
They shouldn't just have bad PR, or have to pay it back. They should go to prison!
Re: Why is this not theft? (Score:1)
While it does happen occasionally, itâ(TM)s quite hard for an affluent person to go to prison in the US. Prison is for the poor.
They know this, and have little fear of this outcome.
Another argument for cash (Score:1)
And just like that... (Score:2)
Technology proves cash is crucial.
What in tarnation?? (Score:2)
In my experience, the majority of deliveries from companies like Doordash are generally fast food or at least chain food.
For Christ's sake, get off your lazy ass and go get Taco Bell yourself! Get a minimal amount of exercise during the pursuit of over-processed, low quality "food" you're about to shove into your face-hole!
It figures . . . (Score:2)
Tired of tipping (Score:2)
Is your cart before the horse? (Score:2)
Workers need to be paid a living wage before you get rid of tips. Are you demanding at least a $15 minimum wage?
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Workers need to be paid a living wage before you get rid of tips.
Why am I, the customer, being required to directly pay wages? That SHOULD be between employee and management to decide what their salary should be. Also, I have no idea a) what the worker is making before tips and b) what is a 'living' wage.
Are you demanding at least a $15 minimum wage?
I'm not 'demanding' anything. A worker can ask for any wage they want and then decide to accept or decline that position if their request is denied. Again, why is the customer needing to be involved in this? It's beyond stupid.
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So, you're hand waiving while dancing around the core issue, with a touch of elitism thrown in. How charming. Why don't you try waiting tables for $3.50 an hour and see if your priorities stay the same.
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So, you're hand waiving while dancing around the core issue...
We are talking about tipping. My last post was about tipping. Is there some other 'core issue' you were referring to?
...with a touch of elitism thrown in.
In what way?
Why don't you try waiting tables for $3.50 an hour ...
The minimum wage in my state of California is $11 & $12 an hour (depending on business size). Why do I need to give the even more salary, while others that earn the minimum wage in other fields do not?