DoorDash, the nation’s leading food-delivery app, is taking a tip from frustrated workers and customers — and passing along their drivers’ hard-earned tips.
In a series of tweets Tuesday, CEO Tony Xu said the company would overhaul its controversial tipping policy. Under the current rule, a tip left through DoorDash’s app is used to meet the minimum payment promised to its delivery crew. That’s prompted customers, workers and advocacy groups to accuse DoorDash of using gratuities to underwrite drivers’ paychecks.
“From recent feedback,” DoorDash realized that “some customers who *did* tip would feel like their tip did not matter,” Xu wrote. The new rule: Workers’ earnings “will increase by the exact amount a customer tips on every order.” Xu said more details were still to come.
Take the New York Times reporter who recently set out as a food deliveryman and was guaranteed $6.85 for his first DoorDash order. A customer tipped $3 through the app. But the reporter received only $6.85. The company in turn reduced its own payment to $3.85 and used the $3 tip to meet the deliveryman’s minimum guarantee. Issues with how delivery services tip have also been covered by NBC News.
Numerous DoorDash workers have aired the same grievance, often on online forums. One worker posted on reddit that DoorDash “technically doesn’t ‘steal’ your tip. They give it to you. . .BUT they use it to subsidize what they pay out of pocket which is basically the same thing at the end of the day.”
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Advocacy groups are pushing for more explanation from Xu. In a statement, Rachel Lauter, executive director of the labor organization Working Washington, said DoorDash “has been swiping customer tips since they first deployed their deceptive pay model in 2017.” The company needs to explain how it will ensure those two years of tips are “accounted for and redistributed to the workers who should have received them in the first place,” Lauter said.
Tipping has been a controversy for other delivery giants. Last year, Instacart implemented a new policy that guaranteed workers a $10 minimum payment for each delivery batch. But workers found that some of their tips went toward that $10 minimum and said their earnings quickly dropped. In February, Instacart reversed its payment policy and said tips would be separated from Instacart’s minimum guarantee and that delivery workers would be retroactively reimbursed for when their tips went toward those minimums.
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Postmates and Uber Eats say tips aren’t used to subsidize workers’ minimum guarantees, the Verge reported. Grubhub and Seamless told the Verge that drivers keep all tips and that “their per-order earnings” are set independent from gratuities. In February, the Los Angeles Times reported that Amazon sometimes used tips earned by contracted delivery drivers to meet their guaranteed earnings.