DoorDash Changes Tipping Model After Uproar (opens in new tab)

This is so annoying! It's like an automatic thing now when paying in a trendy store using an iPad. It's like, I just ordered, but before I've even gotten my goods, I'm presented with a dialogue on whether I want to pay 5%, 10%, 15% tip (or "no tip" as a small button at the bottom).

I'm sure these businesses have found that merely including the dialogue = free money, so why wouldn't they?

It's just panhandling if you ask for a tip before you've done any service. And it's offensive to get panhandled by a commercial enterprise.

I agree - I think it's an absolute misunderstanding of what a tip means. It completely removes incentive for the dasher to follow delivery instructions, grab extra napkins, ensure food is stored upright, etc. I would be so much more on board with agreeing to a set tip amount beforehand if I don't manually enter one after the food was delivered after x amount of time..

You can just go back and put your tip in the Starbucks tip jar after you have received your service. Also if you pay with the Starbucks mobile app you can add a tip for up to 2 hours after your order is complete.

With the slippery language about the "model" and the future disclosure of said model, I think DoorDash will do something like you describe. Because it takes fewer words to say "Going forward all Dasher's will earn the guaranteed rate plus any tips".

> I think tipping is ingrained in American culture

Tipping is ingrained in American culture because there's an insane disparity between rich and poor and it makes the rich feel better about themselves (and those who do it but wish they didn't then peer pressure their friends into doing it. See the current wave of articles about tipping hotel staff claiming that its the norm even though only a third of people do).

Its stupid and simply shouldn't be a thing. Especially since it means employees' salaries effectively end up at the mercy of customers, and customers are not regulated (eg: there is NOTHING stopping customers from being racist/sexist/bigoted/whatever like there is employers, so pay could theoretically vary drastically and there's fuck all they could do about it).

I don't think that's the problem. I'm American and I'll generalize a bit and say Americans are generally comfortable with tipping as long as the service is a differentiator for what you receive (full service restaurants, hair stylists, drivers, bartenders). The recent frustration has been the explosion of tipping where service has nothing to do with the experience, like fast food restaurants or low cost coffee shops.

When I'm king this will count as false advertising. The biggest printed price must be the price you pay, by default, unless you specifically ask for something unusual.

A bunch of restaurants actually include the tip in prices, there are lists online and you can encourage this practice by eating out there.

IMO you can also encourage this practice by not tipping.

Because. DoorDash would not like you to think it's that you paying DoorDash and DoorDash paying Dashers. That would, in fact, make them independent contractors.

Instead, DoorDash would like you to think that you are paying the Dasher directly. DoorDash provided you a platform to find a Dasher and enter into a delivery agreement with them. And DoorDash is graciously "contributing" to the Dasher's income. This would make them no more an independent contractor than someone looking for work on Craigslist.

I don't think this holds up because DoorDash is custodial of the money before it reaches the Dasher's wallet, and because from the customer's perspective, they're ordering delivery from DoorDash, not a Dasher. But that's just my idle speculation.

Postmates opens a tipping modal after a delivery that CANNOT BE CLOSED without inputting a tip and clicking submit. You literally have to type 0.00 and click submit to continue to use the app. I grew up in a strong tipping household (both parents worked service jobs) and usually tip very highly, but everyone should have the right not to tip if they don't want to (with no shaming or prodding) and companies should not subsidize their operational costs by dark patterning customers into tipping.... grr.

At the same time I hypocritically am a power user of many "gig economy" apps like uber, ubereats, postmates, etc. so I am contributing to the problem more than most.

> I hope they (DoorDash) get sued by their customers for deception, lose in court, and a precedent gets set to end this nonsense.

Unfortunately, this will never happen, because their terms of service includes a binding arbitration clause. (Some of us noticed in time to opt out, but surely not the critical mass needed for a class action.)

> Yes I know how tipping aggregates for wait staff

Quite a few states require wait staff/others to be paid the full minimum wage before tips: https://www.dol.gov/whd/state/tipped.htm

I don't know how what the actual agreement was, but couldn't this be very reasonably structured as a form of insurance/derivative? Like, if I'm a pizza delivery guy, I have some expected stream of tips with a variance. If the total tips I receive in a year is usually in the range $300 - $1000, it may be that I'd much rather have a guaranteed $500 than take the risk, so I might buy insurance from a 3rd party (doesn't have to be my employer), who pays me $500 in exchange for the rights to my tips. This doesn't seem immoral/deceptive to me, and is probably financial equivalent to the DoorDash model.

Just a nit, I’m curious how they can guarantee full payout ($7/$7) without mentioning merchant processing fees? Does the company pay those or is it implied that $7 on full payout would actually be $6.80 after fees? I couldn’t see it being sustainable to absorb the extra fee, but if it is withheld, it seems misleading to not mention it.

(Technically, this question could apply to the tipping industry as a whole)

It does change something. DoorDash's old policy, weird as it is, reduces variability of daily pay for the Dashers. It literally put a derivative structure onto the Dasher pay that reduces volatility -- the pay was cash plus a call option on the tip. Now they will get cash plus the tip. Obviously DoorDash will tune their base pay, but they can't meet the prior model's mean and variance at the same time. How Dashers balance those two is unclear, but generally people need a higher mean to accept higher variance.

The problem is that the old policy only works if the customers don't understand it, and maybe even seems generally unethical.

But isn't this how almost all tipping already works?

I worked at restaurants where I had to report my tips or share them. If I dipped below minimum wage for the month, the restaurant was supposed to add whatever difference was needed (never saw it happen, btw).

So if DoorDash lowers the base pay, I don't see why anyone should die on DoorDash's hill when the base pay of all restaurants around them is a hilarious $2.15/hour. DoorDash pays a minimum of $1 per delivery no matter the tip.

Before people get too angry at DoorDash, they should realize this is ubiquitous.

We're never going to evolve away from tipping culture if our only trick is to get outraged at one company at a time that makes the mistake of having the spotlight fall on them.

Wouldn't that be easy to discover using the same method the NYT used to find this in the first place [1]?

> DoorDash offers a guaranteed minimum for each job. For my first order, the guarantee was $6.85 and the customer, a woman in Boerum Hill who answered the door in a colorful bathrobe, tipped $3 via the app. But I still received only $6.85.

> Here’s how it works: If the woman in the bathrobe had tipped zero, DoorDash would have paid me the whole $6.85. Because she tipped $3, DoorDash kicked in only $3.85. She was saving DoorDash $3, not tipping me.

[1] https://www.nytimes.com/2019/07/21/nyregion/doordash-ubereat...

>If you want to actually compensate the Dashers, tip $0 in the app (raising base pay) and hand them cash at the door. That seems to be the only way to get around this policy.

I am sorry but we have to let you go, because our customers do not seem to like you.

What reason do you have for claiming that total compensation will remain the same? The article certainly doesn't say that.

If they did that, it would inevitably be found out and lead to an even bigger scandal. That would be worse than doing nothing.

The other advantage of tipping in cash is that all the money goes to the Dasher, the government doesn't get to skim off any of that money.

Thank you for pointing that out. It was an interesting read. It seems like most of them blame the customers that didn't want to be deceived rather than the company itself and their shitty practices.

My observation about /r/DoorDash is that nobody there is ever happy.

I first checked it out in 2017, shortly after they implemented the current model. The entire subreddit was a massive open revolt of people complaining that they simply can't survive on what the new model pays them. For the record, I went there because I got curious after I had a string of several dashers who were just awful and couldn't follow basic directions. The impression I got is that everyone on the platform with any intelligence either had quit over the changes or was threatening to, leaving only the people who just don't have the skills to get work anywhere else.

I'd look at it every few months or so after that, and one thing pretty common was that people were suggesting that nobody should tip in the app and that everyone should leave a cash tip because DoorDash steals tips.

When the tipping scandal first hit the news (forcing Instacart to change their policies), I checked it out again, and everyone was talking about how finally the media is calling attention to how awful the tipping situation is and again suggesting that nobody ever tip in the app.

And now this. DoorDash is fixing this policy, and the people there are still upset. /r/DoorDash is simply the single unhappiest subreddit I've ever seen that isn't a politics sub or a straight-up hate sub.

My impression using DoorDash, by the way, is that the situation I mentioned above never resolved itself. I have a tendency to use DoorDash because DashPass actually saves me a lot of money (you pay $10/month and get most of your fees taken off on each order above $15... it usually saves me about $5/order, so it pays for itself after two orders a month), but dealing with the drivers is such a colossal headache that ordering something on DoorDash stresses me out each time. I have never had anywhere near the level of problems with drivers on Uber Eats or GrubHub (or Eat24 before them; I still miss that company) that I have with dashers. DoorDash treats its people so poorly that all the good dashers have long since quit, leaving only people who have a marked inability to follow basic directions or instructions. I've found myself ordering from Uber Eats more and more lately, even though I'm paying more, just because the quality of the drivers is so much higher.

Devil's Advocate: Many people in the hospitality industry are making far more via tips than they'd receive from a market wage.

A lot of us are already doing this. I get weird looks all the time, or people will get upset if we’re in a group. A few times waiters actually got upset and asked me why I wasn’t tipping. It’s hard but by principle I’ll still refuse to tip. I wish there was a subreddit community. Maybe r/notip ?

No way others in the industry go for this. If you had the option to legally pay 20%+ less in taxes, would you? Exactly.

Their argument was that it's not a lie. The entirety of your tip _does_ go to the Dasher.

... it's just that they reduce _their_ fee paid to them by, coincidentally, the same amount.

And claim that this offers the Dasher "stability".

yeah, lol. once you do it once, you'll never do it again.

Add tip. Delivery driver fucks up the order/super late/spills your drink. Too late! already tipped.

After the previous tipping drama (Instacart?), and little earlier my discovery that a tip in a hotel restaurant actually doesn't go to waiters, but its taken by the owner, I started to ask workers whether or not they receive the tip in full. So e.g. now I happily tip FreeNow (née MyTaxi) drivers, having two of them confirm to me that they pocket entirety of the tip.

Just set tip to 0 every time.

Can't you tip with cash?

The thing that bothered me the most when I visited North America was that attitude that you absolutely have to tip or otherwise you are some gigantic asshole. We went to a completely average restaurant, had completely average food that was possibly microwaved, the staff was average or below average at best.....and we all added like 15-20% tip at the end. I was just like......why? "Oh because you are a massive dick if you don't tip". I do occasionally tip in the UK when the service is really extraordinary, but feeling like you have to tip, almost completely detached from the actual quality of what you're getting.....that's bizzaire to me. And don't get me started on the nonsense that is tipping delivery drivers for what is effectively 5 seconds long interaction.

Despite how much I agree with you, this is never going to happen, because the real purpose of tips these days is to allow for variable pricing - the "base" price stays low, while people who can afford to tip more often do.

I've seen lots of restaurants implement "no tipping" policies, only to revert back to tipping within a year or two. The reasons:

1. The higher base prices do have a negative impact on sales. 2. The best servers usually want tips, because they can make more at a tipping establishment.

In the past 10/15 years I've changed my attitude around tipping now that pretty much every place I go to "flips around the iPad", asking for a tip. I no longer really think of it as a reward for good service. At the end of the day, I can't imagine trying to survive in a major city on barista wages, and I can afford it, so I tip.

One problem is that the restaurant lobby is surprisingly powerful. In DC, voters approved an initiative eliminating the tipped minimum wage, but the restaurant lobby succeeded in getting the city council to overturn it (after failing to persuade voters against it via lots of astroturfing.)

The problem is that removal of tipping, pretty much just hurts the employees. Customers will probably pay less. Employers will be a bigger cut of the customers actual spending.

Very few restaurants would pay an hourly wage that is equivalent to what waiters are getting tipped now. So the waiter will just get less. Just look at what non-tipped restaurant workers get paid, not well.

I agree that tipping is stupid. Tipping incentivizes me to spend less and eat at restaraunts less, because I only want to spend a dollar tipping, at most, and so seek to spend around ten dollars, at most.

The only reason I tip at all is because some restaraunts will remember me and you tip or get to wonder if they spit in your food. What a wonderful system.

I tip nowhere else and, since I'm not remembered, I face no negative consequences of this.

In Seattle, there was a push a few years ago to eliminate tipping in many restaurants. A 20% service charge was automatically added to the bill instead, on the theory that it would result in fairer and higher compensation for restaurant workers. Several of the places I frequent made this change at around the same time. Only a few years later, most restaurants seem to have reverted to the old policy of tipping.

I've been told by several waiters and bartenders that worked in these restaurants that there was an employee revolt. People earned noticeably less money under the mandatory 20% service charge than with tipping. Consequently, no one wanted to work for restaurants that didn't have tipping. It was seen as a socially conscious move but it backfired for the people it was supposed to help.

The behavioral and economic dynamics with tipping in the US seem to be more complex than people account for.

I flat do not tip if there's a delivery charge.

I've seen people make moral arguments about it, but I will not pay twice.

> The pizza driver gets a delivery charge AND a tip!

I think some places don't give the delivery charge to the driver (I hear Papa John's pockets it, but maybe I heard incorrectly).

I agree in that I think tipping in general needs to change. But I was reading the other day where a bar owner was saying he could pay $X. But with tips, his employees were bringing home more than he was. It's hard for me to say this is wrong. What I find wrong, as you point out, is that everyone is asking for tips now. What I don't know is where to draw the line on who can ask for a tip and who can't.

I agree but it doesn’t matter. It’s about eighteen billion times easier to shame a shitty company into confirming to cultural norms than it is to get hundreds of millions of people to change those norms.

The usual explanation for tipping is that the minimum wage for tipped employees is lower than the non-tipped minimum wage (sometimes as low as $2.13).

If you knew everyone was getting paid the minimum wage, would you still tip on a regular basis?

I recently learned that in states like Washington, California, Oregon this is the case [1], and have been tipping less as a result, but still feel slightly bad about it (societal conditioning is strong!).

[1]https://www.minimum-wage.org/tipped

It's all hidden by intention. For example the delivery driver usually doesn't get the delivery charge, so if you don't tip they likely are loosing money to bring you food.

Tipping is a form of price discrimination, which generally makes things more efficient and has been a staple of capitalism since forever. A business actively wants to extract more money from customers who can afford more, and still sell to customers who are more price sensitive. Coupons are the more normal way to do this, but tipping serves this exact purpose. This is in theory good for customers (except in monopolies, where the business extracts all the value), but in practice, sure, I agree tipping is obnoxious as a customer and possibly even worse for those whose pay involves tips.

If I am unhappy with my service or quality of food, I don't tip.

If the server is unhappy with the lack of a tip, and accosts me verbally (which has happened), I will explain my reasoning.

Vote with your wallet, and all that jazz.

If enough people stop tipping for crappy or non-existence services... perhaps eventually it will become more and more difficult for businesses to hire people to work for less than minimum wage... and the world will change.

One short tip at a time.

I am fine with other people thinking I am an asshole, they're free to do so. Most do not.

I have worked in restaurants for years, and I worked my ass off for every tip I received.

If you're serving me a microwaved burger, I don't care if that's the way they do it at this restaurant, I'm not tipping.

To the downvoters... what solution do you propose?

Legislation to be enacted to force restaurant employers the continent-over to start paying their employees more than twice what they're currently getting paid by the company, and increase food prices?

That's never going to happen imho, we tip in North America, and the restaurants pay their employees less than minimum wage, that's just the way it is now.

The pizza driver does not get the delivery charge. Generally that goes to the pizza shop itself. It's covering the overhead of maintaining a delivery program.

I generally don't tip, except for:

- the establishment that I frequent (they remember)

- uber (they affect your rating)

- I knew for sure that it will give me extra service.

In most situation I didn't experience negative affect.

I think the biggest problem I have with tipping is something I never hear people talk about -- it forces us to pay at the end instead of upfront.

Usually the process goes like this:

0: sit, bring water, give order, wait for food

1: eat

2: wait for the waiter to notice we are done. This can take a long time.

3: they want to pre clean the table, at which we say we are done, bring the check please

4: they drop off the check, if you are lucky, you can hand the card to them then,

5: If not, wait for them to come back to pick up your credit card

6: wait some unknown amount of time for them to bring your card back so you can sign and leave a tip

It's so much easier to pay up front and leave the second you are ready. Sometimes that ritual at the end takes longer than it takes me to eat my food.

I generally concur. Living in Japan for a month, attending budget and 5-star accommodations and dining, it was very streamlined to have minimal tipping expected [or unexpected].

In the scenario you describe, I would agree. However, that isn't really a tip. If a service worker provides great service, the option to compensate them for their services should be allowed.(and the inverse for terrible service).

A tip should never go to the business, and if the business is collecting it, it should only go to the tip pool to pay the supporting staff as well.

I don't see how? It seems like the gig economy is essentially profiting from the fact that there are a lot more workers available than decent jobs. How would personal finance education change that situation?

Yes. For every company shamed into sorta kinda doing the right thing, there are so many other less sexy and high profile companies doing the exact same thing. Unions are not perfect, but they're better than nothing.

Perhaps what this article talks about should be reframed as actual (literal) theft, like the way a burglar or pickpocket does: same as if an employer broke into your home, found your wallet, and removed $20 from it that a customer had literally handed to you as their gift to you. Literal burglary/theft/etc.

That would frame it in a way that doesn't somehow legitimize it, and would make employers seem, and be, far more criminal after they decide to reach into someone's pocket and steal cash.

Unions are not better. This isn't 1888 any more.

They charge the employees a fee every paycheck, but when you need them, they'll do what's in their best interest not yours.

As a teen, I was forced to quit a job (with my union rep beside me) for a made up reason. "Better to quit than to be fired" was his advice. Obviously my "quitting" was part of some bigger plan to save a job of his friend or some other concession the boss made to him.

Unions protect the employees as a whole but not the individuals. They have their own interests that are not always aligned with the employees either.

>Wage theft

Does this qualify as wage theft? Per US tipping laws, this is how tipping normally works.