Posted: Feb 05, 2019
An NBC report questions the way two major delivery services pay their employees.
Tipping seems so straightforward: Someone does their job well, and you give them extra money. So when did it all become so complicated? Last year, the government passed new legislation that restaurants owners and managers can’t pocket employees’ tips: Something that seems like it should be pretty obvious. And now, with the gig economy, some unclear — and potentially even unsavory — tipping policies are being uncovered at a couple food delivery companies.
Today, NBC News published a report suggesting that both restaurant delivery provider Doordash and grocery delivery company Instacart use some possibly suspect math in calculating how online tips are factored into employee pay. To put it simply, both companies calculate tips before a deliverer’s minimum pay — meaning that tips are not on top of minimum pay, but contribute to the minimum pay until the minimum is reached. So for example, if a $10 minimum is guaranteed to the driver but the job is worth $7 plus an additional $5 tip, the driver would only get $12 instead of $15.
The restaurant industry has a somewhat similar system. Some states have a “tipped wage” below minimum wage. If a server’s tipped wage plus tips doesn’t reach minimum wage, the restaurant has to make up the difference. However, the tipped wage is firm, guaranteed income. Meanwhile, employees at Doordash and Instacart have asserted that the guaranteed minimum they make appears to fluctuate based on the tip. “Just imagine if I went to dinner and I got my bill and put my tip in and the restaurant said ‘OK, we are now going into adjust Susan’s pay for the day,'” one Doordash driver told NBC News. It’s a small but serious distinction: Helping an employee reach a minimum is one thing; adjusting fixed earnings based on a tip is another.
As a result of the report, Instacart apparently told NBC News it plans to introduce a new $3 minimum payment per batch moving forward. Meanwhile, Doordash’s response as quoted by NBC News didn’t seem to address the issue, simply saying that their model has increased “Dasher satisfaction.”
As far as the competition is concerned, UberEats told NBC News that tips are only taken after the payment has been confirmed and all of this tip goes directly to the driver. And the largest food delivery company, Grubhub, also says 100 percent of tips go to its drivers — though some markets appear to also offer a “guaranteed hourly minimum” which would seem to operate similarly to how a tipped wage works in the restaurant world.
By Mike Pomranz
February 04, 2019
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