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Not exactly. The $5 will always go to the delivery driver, not Tony Xu the CEO. The problem is that they use the tips to obscure what the base pay actually is s

Not exactly. The $5 will always go to the delivery driver, not Tony Xu the CEO. The problem is that they use the tips to obscure what the base pay actually is so workers didn't really know how much they'll make above the guaranteed rate. This was great if people didn't decide to tip since Tony Xu would need to cover the difference (which you use to game btw if you always put $0 tip in the app but handed them a cash tip). This is basically the same model used by restaurants to pay front-of-house staff. They guarantee minimum wage, but actually provide a lower base pay and use tips to make up the difference.

ravenstine 6y ago
Correct. The base pay(let's just say $5, I don't remember if that's what it was) always goes to the driver. However, if the customer added a $2 tip, the driver paid $5 and DoorDash paid the driver $3. If the customer tipped $5, the driver got paid $5 and DoorDash paid nothing, the whole time the customer believing that the tip went to the driver and the driver believing they got no tip. As I stated elsewhere in this thread, the nature of a delivery app "tip" is different from the restaurant industry. Not only do restaurant workers fully understand how their pay model works, but they can get higher pay for providing better service. This isn't possible for most delivery apps because customers almost always enter a tip amount when they pay for the food, before the driver even has a chance to get to the restaurant. This is why customers should tip their drivers in cash. EDIT: The reason I brought up Tony Xu is because his company should be always paying its driver's base pay without taking from the tip. We can get into the semantics of who's paying who when a tip is seen as a "subsidy", but that's not how we should be seeing it in the first place. By potentially paying little to nothing for a delivery being made, DoorDash was able to keep more of its earnings from the delivery. No matter the angle you look at it, DoorDash were the ones taking home more money because of the pay model.
- devrand 6y ago
  I'm not sure that's correct. The system worked like [1]: * Worker is shown a $5 guaranteed paid. * Behind the scenes DD picked some base pay. Let's say $1. * If the customer tipped < $4 then the worker got paid out exactly $5 with DD paying out the difference between the actual tip and the $4. * If the customer tipped >= $4 then the driver got paid $5 + tips - $4. So in your example DD paid $3 and the tip was $5 with a guaranteed rate of $5. This means that the worker would've been paid $8. I agree though, not showing the base pay was very misleading. However, tips never actually replaced the base pay. [1]: This forbes article has a screenshot of the old page describing the model https://www.forbes.com/sites/bizcarson/2019/06/27/doordash-tipping-policy-pay-model-controversy-changes/#535c35135220 https://www.forbes.com/sites/bizcarson/2019/06/27/doordash-t...
  - uoaei 6y ago
    The fact that "base pay" is lower than minimum wage is already setting up an exploitative situation. The laws were made by lobbyists who wanted to make sure the newly freed slaves they employed weren't on the payroll from the employer. "Wrongness" and "illegality" are not the same thing.

ravenstine 6y ago

Correct. The base pay(let's just say $5, I don't remember if that's what it was) always goes to the driver. However, if the customer added a $2 tip, the driver paid $5 and DoorDash paid the driver $3. If the customer tipped $5, the driver got paid $5 and DoorDash paid nothing, the whole time the customer believing that the tip went to the driver and the driver believing they got no tip. As I stated elsewhere in this thread, the nature of a delivery app "tip" is different from the restaurant industry. Not only do restaurant workers fully understand how their pay model works, but they can get higher pay for providing better service. This isn't possible for most delivery apps because customers almost always enter a tip amount when they pay for the food, before the driver even has a chance to get to the restaurant. This is why customers should tip their drivers in cash. EDIT: The reason I brought up Tony Xu is because his company should be always paying its driver's base pay without taking from the tip. We can get into the semantics of who's paying who when a tip is seen as a "subsidy", but that's not how we should be seeing it in the first place. By potentially paying little to nothing for a delivery being made, DoorDash was able to keep more of its earnings from the delivery. No matter the angle you look at it, DoorDash were the ones taking home more money because of the pay model.

devrand 6y ago
I'm not sure that's correct. The system worked like [1]: * Worker is shown a $5 guaranteed paid. * Behind the scenes DD picked some base pay. Let's say $1. * If the customer tipped < $4 then the worker got paid out exactly $5 with DD paying out the difference between the actual tip and the $4. * If the customer tipped >= $4 then the driver got paid $5 + tips - $4. So in your example DD paid $3 and the tip was $5 with a guaranteed rate of $5. This means that the worker would've been paid $8. I agree though, not showing the base pay was very misleading. However, tips never actually replaced the base pay. [1]: This forbes article has a screenshot of the old page describing the model https://www.forbes.com/sites/bizcarson/2019/06/27/doordash-tipping-policy-pay-model-controversy-changes/#535c35135220 https://www.forbes.com/sites/bizcarson/2019/06/27/doordash-t...
- uoaei 6y ago
  The fact that "base pay" is lower than minimum wage is already setting up an exploitative situation. The laws were made by lobbyists who wanted to make sure the newly freed slaves they employed weren't on the payroll from the employer. "Wrongness" and "illegality" are not the same thing.