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DoorDash and Amazon Won't Change Tipping Policy After Instacart Controversy (forbes.com)
An anonymous reader quotes a report from Forbes: The tipping controversy that prompted Instacart to reverse a compensation plan to its contract workers isn't likely to go away: Rivals DoorDash and Amazon Flex are continuing to adjust driver pay based on how much they get tipped, saying doing so ensures a minimum payout. The practice, which has its roots in the way brick-and-mortar restaurants pay waitstaff, has been adapted to suit the needs of app-based delivery companies. The difference is that gig-economy workers are independent contractors, and so aren't protected by the minimum wage laws. Instacart, a $7.6 billion grocery delivery company, made a change in October 2018 that workers would receive at least $10 per delivery order. Customers and shoppers didn't realize that the tips were counting towards that minimum instead of being a bonus on top. So if someone tipped more, Instacart effectively had to pay less. That's how one Instacart delivery driver ended up with Instacart only paying 80 cents and the rest of the minimum being met with tips.
The company reversed its decision on Wednesday after public outcry, admitting that counting tips in its payout totals was "misguided" and has moved to a new pay scale that doesn't factor in tips at all. But DoorDash and Amazon Flex, the contract workforce that delivers packages for Prime Now, continued to stand their ground. DoorDash claims it has been transparent about the tips being part of its delivery driver pay since it made the change in 2017, including on a blog post on whether customers should tip, and maintains that delivery-driver retention and overall satisfaction both "increased significantly" since the change. Both DoorDash and Instacart insist that they never turned the payment dial down if someone received a large tip. Instead, both companies used an algorithm to calculate a base pay rate that would include things like time and effort it took to deliver. If that base pay plus tip fell short of the price they guaranteed, then both companies would pay out more to make sure its delivery drivers reached the payout they had been promised. But in cases where the tip plus its initial calculation reached the promised payout, then the companies would only contribute the amount that the algorithm had calculated the delivery person deserved. One simple solution if you want to make sure your tip gets into the hand of your digital delivery worker: tip in cash.
The company reversed its decision on Wednesday after public outcry, admitting that counting tips in its payout totals was "misguided" and has moved to a new pay scale that doesn't factor in tips at all. But DoorDash and Amazon Flex, the contract workforce that delivers packages for Prime Now, continued to stand their ground. DoorDash claims it has been transparent about the tips being part of its delivery driver pay since it made the change in 2017, including on a blog post on whether customers should tip, and maintains that delivery-driver retention and overall satisfaction both "increased significantly" since the change. Both DoorDash and Instacart insist that they never turned the payment dial down if someone received a large tip. Instead, both companies used an algorithm to calculate a base pay rate that would include things like time and effort it took to deliver. If that base pay plus tip fell short of the price they guaranteed, then both companies would pay out more to make sure its delivery drivers reached the payout they had been promised. But in cases where the tip plus its initial calculation reached the promised payout, then the companies would only contribute the amount that the algorithm had calculated the delivery person deserved. One simple solution if you want to make sure your tip gets into the hand of your digital delivery worker: tip in cash.
is an ideal solution if you are just tipping a merchandise delivery driver. With food orders if you tip on a card presumably some of it gets to the cooks and kitchen staff as well. Not every situation is the same.
With doordash, you pay with a credit card and assign a tip when you place your order. If that amount is visible to the driver before delivery giving a cash tip upon delivery would leave you at risk for angry drivers fucking with your food thinking they weren't getting a tip.
In other words, the ACTUAL minimum wage is still zero.
It's utterly amazing that members of the human species - which put members on another celestial body - are unable to comprehend that.
Your laws can't make someone's labor worth a fixed value.
Don't worry, they "gamified" employment.
You can see your ratings, compare your hours worked, get feedback, and valuable XP!
Switch companies or jobs, and your XP resets to zero, just like in game!
and with bonuses, you might get a loot-box!
Some very rare loot-boxes include:
-full time employment
-healthcare
-time off
-sick days
Keep on playing, and remember to keep on paying!
Or a minimal payout, whichever one is most profitable.
Hey, that directive worked just fine when the target was "deplorables".
What about giving them decent wages? Sure, the services will provide may be more expensive. But, then again, maybe not - after all, there is competition, right? I always find it amazing how certain employers - in particular, those in the restaurant business - have convinced the rest of Americans that it is the latter's duty to directly contribute to maximize the former's profit.
Seriously- just put a bullet in him, a flesh wound is fine. They'll get the message real fast.
This means that a tip does not benefit the deliverer, so there is no reason to tip. The custom in America is that you tip the employee but not an owner. I suppose you could tip in cash if you are there at the time of delivery.
Still dont under stand why you would tip someone in the first place for doing their job...
So you feel they are as dumb as you?
Socialism != Communism.
File under 'M' for 'Manic ranting'
Allowing busness to continue to push costs down onto the worker and customers is a great way to keep millenials down. And they deserve it, because they're also the cause of the stupidity. Amen.
lol - what country are you from? Here in 'merka we just tweet about how terrible this is and then continue using the service anyway.
FTFY.
I work at a pizza place.
doordash is the lowest quality, with the lowest requirements. When they place an order at our store, they lie about who the order is for: always someone in india claiming they live here and that the order is for them, then the driver gets there, and it's obviously doordash: because they park in a no parking zone, are dressed like they are homeless, and are completely rude.
When they enter the store, they just shove their phone in my face. at first i thought they were just rude, and ignored the phone and asked them for the name and order. Then they sound out the name and order like they're in second grade.
We are a small store, not a chain, so my boss gives me free rein to tell any customer to fuck off, so we regularly tell doordash drivers that because we were lied to over the phone about who the order is for, we have cancelled their order. If they are up-front on the phone about the fact it is a doordash order, we will take the order, but if they lie, then we fuck with them.
If the customer themselves complains, we tell them they should have placed the order directly, instead of with a shady company like doordash.
They worst part is that doordash is stealing money from our delivery drivers. The ones who can read, would be fired if they dressed homeless, and who actually make their deliveries on time.
Yes, we deal with other delivery companies, which also hurts our drivers, but doordash is the worst.
Doordash drivers arriving at our customers houses on drugs, looking homeless, and with cold pizza hurts our reputation.
Why is a servers performance any more important than, for example, a machine operators? Both have 'customers' that consume their output, yet the machine operator is deprived of a tip, why? Substitute 'machine operator' for any job. No, the problem is tipping. There's absolutely no reason to do so. If the job doesn't pay enough, you either get a second or even third job, or new career. Period.
...has millions of its citizens eeking an impoverished existence from frantically scrambling around for tidbits & gratuities, while denying them healthcare. What a proud, dignified nation!
It is close enough, and therefore anyone who declares for either one is suspect.
Leftist economics always fails.
I've lived in countries where tipping is not expected or normal and having no tipping is a far better system.
In those places those workers generally have a far higher minimum wage and standard of living because the employers aren't able to play a shell game of where the money comes from.
* Employees can budget better because they know what their income will be and if they do provide a high level of service end up in demand they end up with higher pay anyway.
* Governments are happier because tax is paid
* Customers time isn't wasted becoming informed about individual stupidity like creeping tip rates or mandatory tipping made apparent only upon arrival at the establishment.
This latest and most cynical practice of mandatory tip in addition to; is designed to invoke guilt in customers having them directly pay their service person lest they go home with nothing at all because their employer is paying them so little (or in some cases almost nothing at all). This disgusts me to the point that I now refuse to eat-out at restaurants because it only contributes to the problem.
The only group that likes the tipping system are the service vendors themselves and that should tell you who is really benefiting.
If you want to be part of the solution then stop tipping entirely and force these companies to start paying their employees out of their own pockets instead of yours.
Never tell a Republican that Social Security and Medicare are socialist economic policies. The cognitive dissonance would break their brains.
I know you got flamebaited already, but as a serious response to your question. The problems are (among others, and in no particular order):
1. It allows workers to be paid unacceptably low salaries. Cheap companies can get their customers to pay their workers for them, so they don't have to.
2. It creates a hostile environment, where customers can essentially treat workers as second-class citizens and make them put up with rude, harsh, and abusive behavior (often bordering on sexual assault), because the customers have the ability to directly withhold a significant portion of the worker's pay.
3. It's completely unfair to "less attractive" employees, as there is plenty of hard data showing the younger and better looking workers earn more tips. Often these workers claim it's merely because they are "good at their jobs" but that has been studied and is rarely the case.
4. It makes customers feel awkward, being guilt-tripped into paying more than the listed prices for goods and services simply by virtue of a person standing there expecting a tip.
5. It allows cheapskates to simply not tip. There is no law requiring them to do so. They pay the bill, and no more. This INCENTIVIZES such behavior. Those customers come out ahead by being "jerks" while the high-tipping customers are basically penalized for doing the "right" thing.
And of course the obvious solution to your first example is: PASS A LAW eliminating tipped wages. End of story. Then work to kill the remnants of the tipping culture. It is stupid, counterproductive, and harmful EVEN IF employees are paid a fair wage, but even more so when they aren't.
It also allows workers to potentially "punish" repeat customers for not tipping. It's just plain idiotic that such a system even exists, let alone continues to thrive, seemingly with little to no resistance.
Plus, never pay a tip via EFTPOS: Unless the worker claims it's a busy day and total tips will exceed federal minimum wage.
With some businesses demanding EFTPOS tips are shared with management, service staff must decide whether to sacrifice themselves so management is punished.
Leftist economics always fails.
Yeah, that's why every other industrialized country has free healthcare but no cars: Wait, that was Iraq before Hussein kicked-out the Americans and invested in a middle class.
Anyone notice all the rich people clapping when President Trump promised "America will never be a socialist country"? Corporations people don't want to be held accountable by the poor (or the middle class). They want to scream "evil government" and get more rights than poor people.
Seems there is an Opportunity here with the new "tech based" delivery methods that just does away with tipping. You pay for the food from the restaurant, then just pay a delivery charge and that's it.
Otherwise tips counting towards a "guaranteed minimum" is standard practice to ensure that drivers are making at least minimum wage if the customer stiffs them.
The way it should work is that the driver gets a fixed amount per delivery, then all tips are extra for the driver.