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Businesses Software The Almighty Buck

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.
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DoorDash Still Pockets Workers' Tips Almost a Month After It Promised To Stop

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  • by Luthair ( 847766 ) on Wednesday August 21, 2019 @07:42PM (#59110916)
    I'm surprised this is even legal, in Ontario (Canada) it definitely would not be - https://www.ontario.ca/page/em... [ontario.ca]
    • Re:Legality (Score:4, Insightful)

      by Narcocide ( 102829 ) on Wednesday August 21, 2019 @07:58PM (#59110962) Homepage

      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)

    by WillAffleckUW ( 858324 ) on Wednesday August 21, 2019 @07:46PM (#59110928) Homepage Journal

    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)

      by nonBORG ( 5254161 ) on Wednesday August 21, 2019 @07:58PM (#59110958)
      I agree. It seems that these companies manage to exploit workers in multiple ways, with the economy going well and very low unemployment I am wondering why they still have employees.
      • "very low unemployment "

        If we force everyone to work two shitty jobs maybe we can make unemployment go negative.

    • Never used them to start with.

      Why pay extra to be lazy and turn into Wall-E's version of humanity?

    • by tlhIngan ( 30335 )

      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.

      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

  • by rmdingler ( 1955220 ) on Wednesday August 21, 2019 @07:55PM (#59110952) Journal

    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.

  • by phantomfive ( 622387 ) on Wednesday August 21, 2019 @08:08PM (#59110992) Journal
    Marked: in the queue, not a priority
  • by prochefort ( 471407 ) on Wednesday August 21, 2019 @08:14PM (#59111004) Homepage

    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.

    • by eepok ( 545733 )

      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.

  • by Greyfox ( 87712 ) on Wednesday August 21, 2019 @08:33PM (#59111030) Homepage Journal
    I guess it's back to going out. That means I have to put pants on again. I hate that! But at least I'll be able to get a drink with dinner.
  • How about giving tip in cash like the good old days. Not everyone has cash on hand so adding a tip to credit card convenient but no point if companies garnish.
  • Two solutions: (Score:4, Interesting)

    by forty-2 ( 145915 ) on Wednesday August 21, 2019 @09:20PM (#59111110)

    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.

    • by DogDude ( 805747 )
      How about pay in cash? Everywhere. I think it's pretty insane that people are ok with giving 3% of everything they spend to Visa/MC.
      • Tipping in cash brings its own problems. Tipping in cash often ends up being "under the table", which can either lead to an excessive and unexpected tax burden or reduced Social Security Disability payments in the event of injury. Disability replaces lost wages due to disability. Tips have to be reported to Social Security/IRS to be replaced.

        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
        • >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.

          • "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.

            • 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.

          • Your goodwill can backfire if you don't also include an advisory or reminder of the long term consequences.

            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
            • >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

              • Playing Devil's advocate, how often is it that a delivery driver would arrive at a location and not receive a $6 tip? Interestingly, a $5 bill is a denomination of currency, one I frequently use as a base measure of tipping.

                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
      • Exactly this. If you're using a card you're giving a huge amount of money to CC companies, multiplied by everyone.
        • If you pay off your bill each month then you collect reward points.
          • you do realize the card companies are getting paid on the front end of the transaction too, right? when you use your card at a store the merchant has to pay the card company every time. even if you zero the balance religiously every month the CC company makes money from your activity.
        • 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

      • The 2-3% comes from retailer, very few stores offer cash discount.

      • You don't give 3% to the bank when you pay with credit card, the merchant pays that fee. The smart ones will bake that cost into the price of all goods sold, so you'll be paying it regardless of payment method. Use a credit card that gives cash back, and pay that off every month to avoid paying interest. The only place it really makes sense to pay in cash anymore is at gas stations that give a discount for doing so. This had largely disappeared in my area for years, but they brought it back recently so it's
      • 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

    • 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?

    • 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. ;)

  • by johannesg ( 664142 ) on Thursday August 22, 2019 @02:27AM (#59111504)

    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)

      Comment removed based on user account deletion
      • 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.

      • by eepok ( 545733 )

        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.

      • Comment removed based on user account deletion
      • 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

      • 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.

    • 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.

    • 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.

  • 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

    • 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

    • 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.

  • People give DoorDash money with the explicit intent that it is giving to the drivers on top of their salary. DoorDash is stealing this money.

    They shouldn't just have bad PR, or have to pay it back. They should go to prison!
    • They shouldn't just have bad PR, or have to pay it back. They should go to prison!

      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.

  • I always tip in cash, at the table or directly to the server/delivery driver, even if I pay electronically. Too many businesses have done (or continue to do) the DoorDash shuffle when it comes to electronic tips. Worth noting: same game has been played when you pay in cash, but add the tip at the till. ----- Personally, not tipping is not a morally acceptable option. Way too many governments have two-step wage laws, where food industry workers can be legally paid less than minimum wage, based on the a
  • Technology proves cash is crucial.

  • 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!

  • Tony Xu, former McKinsey guy . . . one must expect such unethical behavior!
  • Can we just finally get rid of tipping? It's gone from 'Nice job, here's a little something extra' to 'OMG if I don't get tips how can I survive on my crappy salary???" I'm tired of someone doing nothing more than handing me something from behind the counter and then seeing an 'add tip' screen when I swipe my card.
    • Workers need to be paid a living wage before you get rid of tips. Are you demanding at least a $15 minimum wage?

      • 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.

        • by Uberbah ( 647458 )

          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.

          • 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?

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