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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsDoorDash Says It's Very Sorry You Noticed Its Tip-Skimming Scheme
From https://gizmodo.com/doordash-says-it-s-very-sorry-you-noticed-its-tip-skimm-1836652047
Tom McKay
[ 8:13 AM, July 24, 2019 ]
Food delivery app DoorDash has, for months, doubled down on its policy of systematically skimming customer tips meant for its fleet of contract delivery workers. That resolve cracked on Tuesday night when CEO Tony Xu took to Twitter to announce some unspecified changes to its compensation model.
Heres how it worked. DoorDash offers its delivery drivers a guaranteed payout for each order, upfronta flat $1 per order plus additional compensation calculated by some kind of malign algorithm. So if a driver is told theyll make $8 upfront for an order, theyll always receive at least $8. But if the customer receiving that order gave the driver a $4 tip, DoorDash would treat it as a credit towards the originally guaranteed $8, meaning the driver would still only get $8. The only circumstance in which a customers tip would actually go to the driver is if it was very generous.
In other words, DoorDash customers were essentially conned into tipping DoorDash, not the driver. This is vaguely similar to the tipped model for many restaurant employees across the country who have tips applied towards a portion of their minimum wage standard, except abstracted through an app and imposed on a contract workforce with few labor protections. Most restaurants also didnt have an estimated valuation of $7.1 billion in February 2019.
While DoorDash has previously stood by this policy even under withering criticism, it would appear that the company has finally had it up to here with the proles whining. Sort of, kinda, maybe. On Tuesday night, Xu tweeted that DoorDash missed that their policy of tip-shaving would make some customers feel like tipping did not matterwhich could be generously described as a non-apologyand that after a year of ambiguous research, the company will now implement a new model [that] will ensure that Dashers earnings will increase by the exact amount a customer tips on every order.
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Demovictory9
(32,457 posts)Sneederbunk
(14,291 posts)Lochloosa
(16,066 posts)Luciferous
(6,082 posts)NewJeffCT
(56,828 posts)but, when I go to restaurants or get food delivery, I usually tip in cash. Especially for delivery. Sometimes, if I'm at a restaurant, I may not have enough cash for a tip because I try to avoid carrying a lot of cash.
tblue37
(65,408 posts)Sherman A1
(38,958 posts)pure and simple. The management should be arrested for theft and prosecuted just as any common criminal which is exactly what they happen to be.
cbdo2007
(9,213 posts)Celerity
(43,415 posts)or so per year base salary for servers, let alone for delivery drivers.
I tip completely different in the US than I do in the UK and EU.
You don't want to tip, then do not whinge when your US dinner for two lowish bill goes from 60, 70 USD total to 130 or more USD to cover the extra salary pay.
cbdo2007
(9,213 posts)The reason US restaurants don't pay more is because of tipping, not vice versa. Tipping started as a way of saying thank you for good service, it has only more recently been used as a way to even out wages, and still most people I know do it to reward good service NOT to even out wages.
Celerity
(43,415 posts)Being a good server or delivery driver is a hard, hard job, and to equal the income they now (the good ones) make would crush the economic model used by most US dining establishments.
gratuitous
(82,849 posts)How much of the price of a meal do you think is directly attributable to labor costs?
Celerity
(43,415 posts)resto. The servers I know make 150 to 200 USD plus shift in tips in the US.
gratuitous
(82,849 posts)But you keep peddling the restaurateur talking points if it makes you feel better.
Celerity
(43,415 posts)Your 'living wage' (lets call it 15/hr) for a full time wait staff at a medium sized semi upscale full service establishment would bankrupt it in a couple months or two unless they massively increased prices, which would have the same effect in terms of closure. The average failure rate for start-ups is already extremely high (in some places it is above 80% within the first 24 months.)
Plus, good luck getting a good server who is used to walking out with 200 USD cash a night in tips to walk away with nothing but around 500 USD per week after tax in the form of a cheque for 40 hours of grinding work. That IS what we are talking about because this entire colloquy was started over the positing of removing tips and replacing them with wages to make up the difference. To replace the take home rate for the top half of the server staff would take even more, far more, than 15/hour USD.
I have family and friends who ran and/or owned restos in the past in both Los Angeles and NYC (as well as London, which is an entirely different paradigm fraught with its own issues.) The wage only model, put into play in the US, combined with rental rates, etc. would crush most all ventures.
dawg day
(7,947 posts)Not everyone works at an expensive steakhouse.
And in many places, the servers have to give 1/4 of their tips to a common fund that goes to other workers, like the busers and cooks.
Celerity
(43,415 posts)shoehorn every type of resto into the same model. If your examples come from a smaller, less expensive living area, then perhaps you could find a competent serving staff willing to work for a pure wage/no tip scheme, but also, the same economic laws come into play, as that establishment will also have to raise prices to cover the difference as well. For every resto that is raking in huge profits there are 10 or more who are barely scraping by on extremely small margins. Even modest increases in prices of the raw food can make or break many ventures, let alone increasing the cost of labour by a massive percentage to make up for the absence of tips.
It is basic economics. If your outlays/set costs explode, the only way to keep afloat is to increase revenues. The only way to do that is either to massively increase volume (which would also have the knock-on effect of increasing staffing and thus increasing outlays, so a viscous cycle begins) which is entirely speculative, or to increase the end price of the food, which also will, I assure you, have a most deleterious knock-on effect. We are not talking about self-service fast food here, we are talking about an even more labour-intensive model that oft-times involves a somewhat transient workforce (especially in terms of the servers.)
Every full-service resto has its core group of reliable servers, the type who will come in at the last minute to pick up shifts. That core group will quickly accrue hours that necessitate overtime pay (in the wage-only model), which further exacerbates the cost of labour and make the outlays even more untenable to the bottom line.
sl8
(13,787 posts)Am I overlooking something?
At least as far as just the math goes, it seems like losing the 20% (or whatever percentage is appropriate) tip from the patron would be made up for by the owner giving the worker an additional 20%. Effectively, the "tip" would be paid by the restaurant instead of the customer.
Celerity
(43,415 posts)the original post I replied to said do away with all tips
The wage costs would explode.
shanti
(21,675 posts)cbdo2007
(9,213 posts)Always for good service. Usually for mediocre service. Rarely for bad service.
I just wish it wasn't an expected part of the experience, for me, the employee, or the establishment.
dlk
(11,569 posts)This is one of the many reasons why strong union are so vital to protect workers. They provide a necessary counterbalance to employer abuses to the workers generating the profits. BTW, I will never use Door Dash despite their mea culpa. They are inherently dirty. That doesnt change after a OR campaign.
JudyM
(29,251 posts)woodsprite
(11,916 posts)At least some of the establishments contracted by them don't pass the tip along if you tip by adding the amount to the bill you pay by credit card. It was mentioned to me by one of their drivers, to tip in cash rather than online.
We've stopped using GrubHub, and have never used DoorDash.
Does anyone know if Good Uncle works that way? I've never tried them, but they just moved into our area.
PatSeg
(47,501 posts)I always tip in cash. I know how easy it is for employers to rip off employees' tips.
PoliticAverse
(26,366 posts)kimbutgar
(21,163 posts)A friend told me years ago who did this they get screwed out of tip. So I give cash. If I am in a restaurant I also give a cash tip.
keithbvadu2
(36,829 posts)I ask the waiter/waitress if they get the tip if I put it on the credit card.
elocs
(22,582 posts)is that it is not that they are sorry for the words or actions that prompted the apology, they are really sorry they got caught or called out and are trying to smooth it over.
Celerity
(43,415 posts)TeamPooka
(24,229 posts)JCMach1
(27,559 posts)Or continue giving them the hose
Brainstormy
(2,380 posts)zackymilly
(2,375 posts)There are several restaurants here where the servers are supposed to put their tips in a universal tip jar and they are split up equally at the end of the night between the all the servers.
There are several lousy servers at these places and they shouldn't be able to take money from the hard-working servers.