An anonymous reader quotes a report from The Verge: When you order food through an app and tip the worker who delivers it, you’d be forgiven for thinking that the money you give goes directly to that person. But in reality, some delivery apps use your tip to make up the worker’s base pay — essentially stealing the money you’re trying to give someone to maximize their profits. This isn’t a new practice by any means, but a recent report from The New York Times highlights how DoorDash, the most popular food delivery app in the U.S., enforces it.
Here’s Times reporter Andy Newman: “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.” “DoorDash’s policy is the equivalent of a ‘tipped wage,’ a common practice in America where employers pay workers less than the minimum wage and rely on tips to make up the payments they owe,” the report adds. “Apps like DoorDash are essentially just extending established bad labor practices into the world of tech.”
Amazon Flex also uses tips to make up pay, even after being heavily criticized for it. Instacart was the same way, but it scrapped the policy and promised to retroactively compensate workers following outcry. Postmades, Grubhub, Seamless, and Uber Eats all confirmed to The Verge that customer tips are not used to subsidize workers’ pay.