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This doesn't change anything. DoorDash will lower the base pay of the orders, meaning the total compensation for Dashers will remain the same. DoorDash has a m

This doesn't change anything. DoorDash will lower the base pay of the orders, meaning the total compensation for Dashers will remain the same. DoorDash has a model for what it considers "fair compensation" for an order. Since the company can see exactly what the customers tip in advance, they'll just subtract the tip amount from their previously calculated "fair compensation" and show that base pay / tip breakdown to the Dashers. DoorDash isn't going to suddenly increase its Dashers' pay by 50%. If you want to actually compensate the Dashers, tip $0 in the app (raising base pay) and hand them cash at the door. That seems to be the only way to get around this policy.

jakelazaroff 7y ago
Wouldn't that be easy to discover using the same method the NYT used to find this in the first place [1]? > DoorDash offers a guaranteed minimum for each job. For my first order, the guarantee was $6.85 and the customer, a woman in Boerum Hill who answered the door in a colorful bathrobe, tipped $3 via the app. But I still received only $6.85. > Here’s how it works: 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. [1] https://www.nytimes.com/2019/07/21/nyregion/doordash-ubereats-food-app-delivery-bike.html https://www.nytimes.com/2019/07/21/nyregion/doordash-ubereat...
- gringoDan 7y ago
  In that case, DoorDash will guarantee $3.85, knowing full well you'll make $6.85 for the order. Edit - I'd expect they'll show something like the below Total pay: $6.85 Guaranteed base pay: $3.85 Tip: $3.00
- unreal37 7y ago
  But that's OK. They should lower the amount that they offer for a delivery to not include the tip. And then drivers will refuse to work for them and they'll be forced to increase it. Supply and demand.
  - jakelazaroff 7y ago
    No, they shouldn't. If these were actual employees, that would be theft. The only reason it's not is that DoorDash has decided to classify them as "independent contractors", which don't receive the same protections.
    - RHSeeger 7y ago
      It's not theft. It's the exact same way that it works for waiters. From a post elsewhere In a restaurant - The waiter is guaranteed normal minimum wage. - The owner guarantees they will pay a minimum of <whatever waiter minimum wage is; less than normal minimum wage> - The waiter gets tips from patrons, which generally brings them over normal minimum wage - If the waiter's tips do not bring them above minimum wage, then the owner is required to pay them an amount that would bring them up to minimum wage. With DD, it works more or less the same way, with the difference being that the minimums (upper and lower) are per delivery, not per hour. If fact, odds are the DD deliverers are going to be worse off now, because DD isn't going to guarantee them a minimum amount; rather, they'll present "we pay you X + you get the tip which is likely around Y". And if the tip isn't enough, the deliverer winds up making less. Unlike before where they got the minimum.
      - jakelazaroff 7y ago
        Restaurants give you an hourly wage that is less than minimum wage, and if that wage plus tips is still less than minimum wage, they're required to pay you the difference. If your hourly wage + tips is more than minimum wage, restaurants cannot reduce your hourly wage to compensate. My understanding is that DoorDash was doing the opposite: giving you a guaranteed wage and then subtracting the tips from that. It's as if a restaurant were paying you an hourly wage without tips, and then accepting tips on your behalf. If a customer had tipped 100% of the guaranteed pay, do you think the deliverer would have seen any of that tip? Or would it all have counted against the guaranteed pay?
        RHSeeger 7y ago
- SkyBelow 7y ago
  > Here’s how it works: 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. But that is tipping. A waiter makes $7.25 an hour. If they receive $2 in tips, the business only has to pay them $5.25 for that hour instead. There is a lower limit (around $2, I forget the exact amount), and tipping over that limit goes to the employee, but any tips under that limit effectively go to the company.
  - mullingitover 7y ago
    > A waiter makes $7.25 an hour. If they receive $2 in tips, the business only has to pay them $5.25 for that hour instead. This is false. Only a subset of states allow this corrupt practice, here's a handy list: https://en.wikipedia.org/wiki/Tipped_wage#State_law https://en.wikipedia.org/wiki/Tipped_wage#State_law
    - bena 7y ago
      He was saying that's how it effectively works, and he's right. The federal minimum wage for tipped employees is $2-ish with the caveat that if an employee isn't making on average $7.25 for the pay period when factoring in tips, the employer is legally obligated to make up the difference. So if an employee's tips average out to the difference between tipped minimum wage and regular minimum wage, then all you've done is save the restaurant money. The employee was going to get that amount regardless. It's only when the tipped amount exceeds the difference on average does the employee come out ahead.
    - SkyBelow 7y ago
      I counted only 7 states where it is not true based on the state laws and 1 state where it was not true for large employees. It is generally true in most states in practice, and is how tipping works per federal laws. I should have probably have mentioned I was speaking to the federal law and local/state/city laws can work differently in some areas.
      - 7y ago
Stasis5001 7y ago
It does change something. DoorDash's old policy, weird as it is, reduces variability of daily pay for the Dashers. It literally put a derivative structure onto the Dasher pay that reduces volatility -- the pay was cash plus a call option on the tip. Now they will get cash plus the tip. Obviously DoorDash will tune their base pay, but they can't meet the prior model's mean and variance at the same time. How Dashers balance those two is unclear, but generally people need a higher mean to accept higher variance. The problem is that the old policy only works if the customers don't understand it, and maybe even seems generally unethical.
- ljlolel 7y ago
  They can offer a "performance"-based weekly "bonus" which would be the difference for under-tipped people. Normalizing the same pay on a weekly (or daily) basis.
- rtkwe 7y ago
  It was very unethical. Calling something a tip implies a lot in the US and in most other industries the tip legally can't be taken by the employer and compensation has to at least total to the minimum wage.
  - bena 7y ago
    They don't work for DoorDash however, they're contractors who are agreeing to terms with DoorDash.
    - koolba 7y ago
      It's going to be a sad day if the argument in court is that the customer is "tipping DoorDash" (and not the actual delivery contractor).
    - rtkwe 7y ago
      Most people don't really get the contractor/employee split that all these companies take advantage of and even then the word TIP has certain implications. If I tip someone well I expect the worker to get more not for the company employing or contracting them to pay less, I want the money to go to the person not the company. Even in the US where tips go against wages it's not so bad, generally the first tip or two will cover the difference and workers are probably doing way better than that. Doordash on the other hand applied the same thing to /every/ order.
hombre_fatal 7y ago
But isn't this how almost all tipping already works? I worked at restaurants where I had to report my tips or share them. If I dipped below minimum wage for the month, the restaurant was supposed to add whatever difference was needed (never saw it happen, btw). So if DoorDash lowers the base pay, I don't see why anyone should die on DoorDash's hill when the base pay of all restaurants around them is a hilarious $2.15/hour. DoorDash pays a minimum of $1 per delivery no matter the tip. Before people get too angry at DoorDash, they should realize this is ubiquitous. We're never going to evolve away from tipping culture if our only trick is to get outraged at one company at a time that makes the mistake of having the spotlight fall on them.
- gringoDan 7y ago
  Agreed. That being said, everyone knows that waiters/waitresses make their pay from tips. I think that most people had the expectation that delivery drivers were making base pay, and any tips were on top of that - the equivalent of handing the pizza delivery driver a couple of bucks when they get to the door. This was not the case, and certainly not communicated clearly to customers.
  - thaumasiotes 7y ago
    The fact that restaurants confiscate and aggregate all tips to divide them among the wait staff and the never-actually-tipped kitchen staff is also not communicated to customers. It is a matter of restaurant policy.
    - cco 7y ago
      Also illegal, so report a restaurant if you know they’re doing that.
      - lonelappde 7y ago
        It is legal. It happens everywhere and it's even required by law in New York. https://fortune.com/2014/03/20/starbucks-new-digital-tip-jar-wont-benefit-baristas/ https://fortune.com/2014/03/20/starbucks-new-digital-tip-jar...
oiasdjfoiasd 7y ago
people actually tip delivery drivers? Unless there was something exceptional (they were super quick, etc.) I never tip.
neonate 7y ago
What reason do you have for claiming that total compensation will remain the same? The article certainly doesn't say that. If they did that, it would inevitably be found out and lead to an even bigger scandal. That would be worse than doing nothing.
NullPrefix 7y ago
>If you want to actually compensate the Dashers, tip $0 in the app (raising base pay) and hand them cash at the door. That seems to be the only way to get around this policy. I am sorry but we have to let you go, because our customers do not seem to like you.
- inimino 7y ago
  It would show up in their metrics as a particular customer (or percentage of customers) never tipping, not a particular driver never getting tipped.
pravda 7y ago
The other advantage of tipping in cash is that all the money goes to the Dasher, the government doesn't get to skim off any of that money.
deleted 7y ago
[deleted]

jakelazaroff 7y ago

Wouldn't that be easy to discover using the same method the NYT used to find this in the first place [1]? > DoorDash offers a guaranteed minimum for each job. For my first order, the guarantee was $6.85 and the customer, a woman in Boerum Hill who answered the door in a colorful bathrobe, tipped $3 via the app. But I still received only $6.85. > Here’s how it works: 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. [1] https://www.nytimes.com/2019/07/21/nyregion/doordash-ubereats-food-app-delivery-bike.html https://www.nytimes.com/2019/07/21/nyregion/doordash-ubereat...

gringoDan 7y ago
In that case, DoorDash will guarantee $3.85, knowing full well you'll make $6.85 for the order. Edit - I'd expect they'll show something like the below Total pay: $6.85 Guaranteed base pay: $3.85 Tip: $3.00
unreal37 7y ago
But that's OK. They should lower the amount that they offer for a delivery to not include the tip. And then drivers will refuse to work for them and they'll be forced to increase it. Supply and demand.
- jakelazaroff 7y ago
  No, they shouldn't. If these were actual employees, that would be theft. The only reason it's not is that DoorDash has decided to classify them as "independent contractors", which don't receive the same protections.
  - RHSeeger 7y ago
    It's not theft. It's the exact same way that it works for waiters. From a post elsewhere In a restaurant - The waiter is guaranteed normal minimum wage. - The owner guarantees they will pay a minimum of <whatever waiter minimum wage is; less than normal minimum wage> - The waiter gets tips from patrons, which generally brings them over normal minimum wage - If the waiter's tips do not bring them above minimum wage, then the owner is required to pay them an amount that would bring them up to minimum wage. With DD, it works more or less the same way, with the difference being that the minimums (upper and lower) are per delivery, not per hour. If fact, odds are the DD deliverers are going to be worse off now, because DD isn't going to guarantee them a minimum amount; rather, they'll present "we pay you X + you get the tip which is likely around Y". And if the tip isn't enough, the deliverer winds up making less. Unlike before where they got the minimum.
    - jakelazaroff 7y ago
      Restaurants give you an hourly wage that is less than minimum wage, and if that wage plus tips is still less than minimum wage, they're required to pay you the difference. If your hourly wage + tips is more than minimum wage, restaurants cannot reduce your hourly wage to compensate. My understanding is that DoorDash was doing the opposite: giving you a guaranteed wage and then subtracting the tips from that. It's as if a restaurant were paying you an hourly wage without tips, and then accepting tips on your behalf. If a customer had tipped 100% of the guaranteed pay, do you think the deliverer would have seen any of that tip? Or would it all have counted against the guaranteed pay?
      - RHSeeger 7y ago
SkyBelow 7y ago
> Here’s how it works: 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. But that is tipping. A waiter makes $7.25 an hour. If they receive $2 in tips, the business only has to pay them $5.25 for that hour instead. There is a lower limit (around $2, I forget the exact amount), and tipping over that limit goes to the employee, but any tips under that limit effectively go to the company.
- mullingitover 7y ago
  > A waiter makes $7.25 an hour. If they receive $2 in tips, the business only has to pay them $5.25 for that hour instead. This is false. Only a subset of states allow this corrupt practice, here's a handy list: https://en.wikipedia.org/wiki/Tipped_wage#State_law https://en.wikipedia.org/wiki/Tipped_wage#State_law
  - bena 7y ago
    He was saying that's how it effectively works, and he's right. The federal minimum wage for tipped employees is $2-ish with the caveat that if an employee isn't making on average $7.25 for the pay period when factoring in tips, the employer is legally obligated to make up the difference. So if an employee's tips average out to the difference between tipped minimum wage and regular minimum wage, then all you've done is save the restaurant money. The employee was going to get that amount regardless. It's only when the tipped amount exceeds the difference on average does the employee come out ahead.
  - SkyBelow 7y ago
    I counted only 7 states where it is not true based on the state laws and 1 state where it was not true for large employees. It is generally true in most states in practice, and is how tipping works per federal laws. I should have probably have mentioned I was speaking to the federal law and local/state/city laws can work differently in some areas.
    - 7y ago

Stasis5001 7y ago

It does change something. DoorDash's old policy, weird as it is, reduces variability of daily pay for the Dashers. It literally put a derivative structure onto the Dasher pay that reduces volatility -- the pay was cash plus a call option on the tip. Now they will get cash plus the tip. Obviously DoorDash will tune their base pay, but they can't meet the prior model's mean and variance at the same time. How Dashers balance those two is unclear, but generally people need a higher mean to accept higher variance. The problem is that the old policy only works if the customers don't understand it, and maybe even seems generally unethical.

ljlolel 7y ago
They can offer a "performance"-based weekly "bonus" which would be the difference for under-tipped people. Normalizing the same pay on a weekly (or daily) basis.
rtkwe 7y ago
It was very unethical. Calling something a tip implies a lot in the US and in most other industries the tip legally can't be taken by the employer and compensation has to at least total to the minimum wage.
- bena 7y ago
  They don't work for DoorDash however, they're contractors who are agreeing to terms with DoorDash.
  - koolba 7y ago
    It's going to be a sad day if the argument in court is that the customer is "tipping DoorDash" (and not the actual delivery contractor).
  - rtkwe 7y ago
    Most people don't really get the contractor/employee split that all these companies take advantage of and even then the word TIP has certain implications. If I tip someone well I expect the worker to get more not for the company employing or contracting them to pay less, I want the money to go to the person not the company. Even in the US where tips go against wages it's not so bad, generally the first tip or two will cover the difference and workers are probably doing way better than that. Doordash on the other hand applied the same thing to /every/ order.

hombre_fatal 7y ago

But isn't this how almost all tipping already works? I worked at restaurants where I had to report my tips or share them. If I dipped below minimum wage for the month, the restaurant was supposed to add whatever difference was needed (never saw it happen, btw). So if DoorDash lowers the base pay, I don't see why anyone should die on DoorDash's hill when the base pay of all restaurants around them is a hilarious $2.15/hour. DoorDash pays a minimum of $1 per delivery no matter the tip. Before people get too angry at DoorDash, they should realize this is ubiquitous. We're never going to evolve away from tipping culture if our only trick is to get outraged at one company at a time that makes the mistake of having the spotlight fall on them.

gringoDan 7y ago
Agreed. That being said, everyone knows that waiters/waitresses make their pay from tips. I think that most people had the expectation that delivery drivers were making base pay, and any tips were on top of that - the equivalent of handing the pizza delivery driver a couple of bucks when they get to the door. This was not the case, and certainly not communicated clearly to customers.
- thaumasiotes 7y ago
  The fact that restaurants confiscate and aggregate all tips to divide them among the wait staff and the never-actually-tipped kitchen staff is also not communicated to customers. It is a matter of restaurant policy.
  - cco 7y ago
    Also illegal, so report a restaurant if you know they’re doing that.
    - lonelappde 7y ago
      It is legal. It happens everywhere and it's even required by law in New York. https://fortune.com/2014/03/20/starbucks-new-digital-tip-jar-wont-benefit-baristas/ https://fortune.com/2014/03/20/starbucks-new-digital-tip-jar...

oiasdjfoiasd 7y ago

people actually tip delivery drivers? Unless there was something exceptional (they were super quick, etc.) I never tip.

neonate 7y ago

What reason do you have for claiming that total compensation will remain the same? The article certainly doesn't say that. If they did that, it would inevitably be found out and lead to an even bigger scandal. That would be worse than doing nothing.

NullPrefix 7y ago

>If you want to actually compensate the Dashers, tip $0 in the app (raising base pay) and hand them cash at the door. That seems to be the only way to get around this policy. I am sorry but we have to let you go, because our customers do not seem to like you.

inimino 7y ago
It would show up in their metrics as a particular customer (or percentage of customers) never tipping, not a particular driver never getting tipped.

pravda 7y ago

The other advantage of tipping in cash is that all the money goes to the Dasher, the government doesn't get to skim off any of that money.

deleted 7y ago

[deleted]