Businesses like DoorDash, Uber Eats, and Postmates all allow customers to tip their delivery person after an order, but where exactly that dollar amount goes has stirred up some major controversy in the past few months. San Francisco-based food delivery service, DoorDash, has recently come under fire for using its workers’ individual tips to subsidize base pay. In other words, the company is pocketing tips to pay its employees their hard-earned salaries. However, DoorDash’s policy on tipping is not new – it’s been in place since 2017. Outrage sparked in February whenDoorDash employees began sharing posts on social media that commented on their lack of tips.
Getting Defensive – DoorDash Stands By its Tipping Policy
It’s important to note that DoorDash wasn’t the only business keeping its workers’ tips. Instacart got some flack when one of its workers went viral after revealing an eighty-cent payment from a job where he was tipped ten dollars. Instacart’s CEO quickly responded to the internet’s fury by apologizing and adjusting the company’s tipping policy. DoorDash, on the other hand, refused to be pressured into a change. The company stood its ground and stated that employees are content, even happier, with its tipping policy. On DoorDash’s website, one can find how the service pays its workers or its “dashers.” Before accepting a delivery job, dashers are provided with a guaranteed payment depending on location, size of the delivery, traffic, etc. Essentially, said guaranteed payment amount is an issue because it is partially fronted by customer tips rather than the company in general.
A Change of Heart – With Zero Follow-Through
DoorDash claims its dashers make an average of $17.50 an hour, and that their tipping policy is backed by “transparency” and “being fair.” However, after a few months of continued disapproval, the company decided to change its stance. CEO Tony Xu announced in a series of tweets on July 23rd that DoorDash planned on adjusting its policy so that dashers would be properly tipped for each job. Today (more than a month after the announcement), no changes have been made in how DoorDash employees are tipped. The company’s controversial pay model is still on the website, highlighting its emphasis on a guaranteed minimum and supposedly consistent earnings.
What DoorDash’s Tipping Scandal Means for Restaurants
Delivery apps, like DoorDash, provide restaurants with access to more customers and are a fabulous way to advertise. On the other hand, these services aren’t free for restaurant owners. Most apps charge a one-time fee and then a percentage of the order amount as commission. This poses an important question that businesses need to consider when researching potential delivery apps to partner with – where is the money going exactly? DoorDash hasn’t been accused of “stealing tips” from workers necessarily but instead found guilty of redirecting them. One would assume that the commission deducted from every order contributes somewhat to a worker’s paycheck, but with DoorDash’s questionable tipping policy that may not be the case. Moral compasses aside, restaurant owners need to be skeptical of delivery apps. Where is your money going? Is that fair? Is that justified? Question apps before choosing a delivery partner.