Customers ordering food delivery on demand were angered to learn that some of the Silicon Valley tech startups they’ve helped to enrich have been counting tips as part of delivery workers’ base pay.
If a driver is guaranteed a base pay for delivering an order but the delivery and service fees don’t meet that base, your tip could go toward that guaranteed minimum.
By doing this, some of the app owners are reducing what they pay workers out of their own coffers. A backlash followed on Twitter.
As a result of the outcry, DoorDash CEO Tony Xu announced on Tuesday that his company will no longer use customer tips to subsidize delivery workers’ base pay, Slate reported.
DoorDash is on-demand food delivery service that has raised $2 billion in funding. It was founded in 2013 by Stanford students Andy Fang, Stanley Tang, Tony Xu and Evan Moore and backed by Y Combinator. DoorDash is one of several technology companies that uses logistics services to offer food delivery from restaurants.
“Going forward, we’re changing our model – the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order,” Xu wrote on Twitter following the backlash from customers.
Here’s how some of the other on-demand food delivery tech companies handle your tips, thanks to Slate:
Amazon uses tips toward guaranteed driver base pay, the Los Angeles Times reported earlier this year. Amazon’s grocery delivery workers “earn $18-25 per hour, including 100% of tips,” the company told Slate.
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Postmates told Slate that it doesn’t use tips to subsidize delivery workers’ pay. The app asks customers to include a tip after the delivery is completed and doesn’t allow new orders until the customer has chosen either to tip or not.
When you tip using Grubhub, the whole tip goes to the delivery person and it’s not used to subsidize workers’ pay, Grubhub confirmed to Slate.
Valued at $8 billion, Instacart offers same-day grocery delivery and pick-up service in the U.S. and Canada. Workers don’t just deliver, they usually shop for customers as well. Instacart stopped counting customer tips toward couriers’ base pay in February following outcry from workers and customers when shoppers started sharing stories. One shopper reported getting paid $10.80 for a job despite receiving a $10 tip.
Caviar workers deliver meals — often on a bicycle with a pack of food on their backs — and workers keep all of their tips, which don’t count toward base pay.
With Uber Eats, 100 percent of tips from customers are given to delivery workers on top of whatever they earn for the order, the company told Slate.
As a customer, your best bet is to tip in cash to make sure that the delivery person gets your money — not the company.
