Food delivery app DoorDash has, for months, doubled down on its policy of systematically skimming customer tips meant for its fleet of contract delivery workers. That resolve cracked on Tuesday night when CEO Tony Xu took to Twitter to announce some unspecified changes to its compensation model.
Here’s how it worked. DoorDash offers its delivery drivers a guaranteed payout for each order, upfront—a flat $1 per order plus additional compensation calculated by some kind of malign algorithm. So if a driver is told they’ll make $8 upfront for an order, they’ll always receive at least $8. But if the customer receiving that order gave the driver a $4 tip, DoorDash would treat it as a credit towards the originally guaranteed $8, meaning the driver would still only get $8. The only circumstance in which a customer’s tip would actually go to the driver is if it was very generous.
In other words, DoorDash customers were essentially conned into tipping DoorDash, not the driver. This is vaguely similar to the tipped model for many restaurant employees across the country who have tips applied towards a portion of their minimum wage standard, except abstracted through an app and imposed on a contract workforce with few labor protections. Most restaurants also didn’t have an estimated valuation of $7.1 billion in February 2019.
While DoorDash has previously stood by this policy even under withering criticism, it would appear that the company has finally had it up to here with the proles whining. Sort of, kinda, maybe. On Tuesday night, Xu tweeted that DoorDash “missed” that their policy of tip-shaving would make some customers feel like tipping “did not matter”—which could be generously described as a non-apology—and that after a year of ambiguous “research,” the company will now implement a “new model [that] will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order.”
Notably absent from Xu’s thread is any contrition for its practice of ripping off its underpaid labor force. It is also unclear whether Xu’s statistic that DoorDash’s “average contribution to Dashers stayed the same” since it started pocketing portions of tips in 2017 includes the pocketed tips as part of Doordash’s “contribution.”
Xu also did not go into further details on the policy changes, leaving it unclear whether DoorDash’s supposed end to tip-skimming comes with a giant asterisk—for example, adjustments to its guaranteed rates that could easily leave DoorDash contractors making the same amount of money as they do now or less, or some other more subtle form of fuckery.
Gizmodo has reached out to DoorDash for comment, and we’ll update this post if we hear back. By the way, good luck on that San Francisco Office of Labor Investigations investigation.
Pyroraptor on July 24th, 2019 at 16:16 UTC »
IANAL but I did a quick search:
In March 2018, Congress amended the Fair Labor Standards Act (the law that governs payment of overtime and wages) to prohibit employers from keeping tips received by employees for any purpose including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.
It sounds like they can around it by saying that they gave them the tip, but also a reduced wage. However, if you do use Doordash then make sure you give them a cash tip. Better yet, use a different food ordering service instead and don't reward this behavior.
ZakDeBal on July 24th, 2019 at 16:15 UTC »
We started tipping cash a few months ago. It was a little eye opening because when I'd hand over cash, drivers seemed very happy. Like "OMG, thank you!" Happy...and that made ME happy and now I want to make other drivers happy and...it's a vicious cycle.
draginator on July 24th, 2019 at 15:37 UTC »
That's messed up