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How a $3 Tip Launched a Delivery-App Uproar

DoorDash just changed its policy after a reporter's first-person story
By John Johnson,  Newser Staff
Posted Jul 25, 2019 9:25 AM CDT

(Newser) – A journalist's first-person story about working as food-app delivery person seems to have stirred up a hornet's nest over the subject of tipping—and prompted one big company, DoorDash, to change its policy. The issue revolves not just around how much to tip but how much of that tip the delivery person gets to keep—and the answer is more complicated than you might imagine. The details:

  • The story: In the New York Times, Andy Newman wrote a first-person piece about the "frantic" nature of delivering food for the likes of DoorDash, Uber Eats, Postmates, Grubhub, etc. In a separate story, he noted that two-thirds of his 43 customers did not tip. But the real hubbub came when he explained the tipping policy on a DoorDash order.
  • The basics: DoorDash guarantees "Dashers" a minimum amount for each order, which varies depending on the size of the order. On Newman's first order, he was guaranteed $6.85. The woman tipped him $3, but he still received only $6.85. "Here’s how it works," he writes: "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."

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  • Subsidizing: Essentially, DoorDash was using tips to subsidize the base of its pay of "Dashers." It's "vaguely similar" to how restaurant employees are paid, notes Tom McKay at Gizmodo, "except abstracted through an app and imposed on a contract workforce with few labor protections."
  • A critic: Here is the take of journalist Louise Matsakis: "I don’t believe that a single person intends to give a tip to a multibillion dollar venture-backed startup," she tweets. "They are trying to tip the person who delivered their order. This deceptive model should be illegal." New York City lawmakers have, in fact, begun looking into the issue.
  • Changes: After the Times story ran and attracted criticism like that above, DoorDash CEO Tony Xu announced a change. "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," he tweeted. "We'll have specific details in the coming days."
  • Bottom line: The company's 400,000 "Dashers" are eagerly awaiting those details. "I'm worried that the orders will guarantee less now, but we get all the tips," wrote one in a Reddit forum, per another Times article. “Meaning a previously guaranteed 10-dollar order might now only guarantee 5 bucks, and you get a 2 dollar tip, meaning you got 7 bucks for that order.”
  • Other companies: Slate runs through what could be learned about the tipping policies of other companies. At Grubhub, for instance, all of the tip goes to the delivery person. Postmates does not use tips to subsidize delivery pay, either. (Despite the controversy, Newman wrote in his first-person piece that he generally made more money from DoorDash orders than some other apps.)
  • Advice: So what's a customer to do? Tip in cash, advises USA Today. And generally speaking, $4 seems fair, according to delivery people and customers surveyed. However, that could be low if the order is large.
(Read more food delivery stories.)

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