5 ms·

> It is a mechanism to move labor costs to the consumer. How does this work? The corp already handles some form of payment to the worker, especially when you t

> It is a mechanism to move labor costs to the consumer. How does this work? The corp already handles some form of payment to the worker, especially when you tip as part of a card payment. And in both cases, the consumer foots the bill. How's it different from paying the worker more and asking for more money upfront?

gmadsen 1y ago
psychologically they are very different. Framing the wages as a "tip" moves the conversation to the drivers and users, where users think tips are an out of hand culture problem and drivers view the users as stingy. Then the company sits out of the spotlight collecting their absurd rents
- deleted 1y ago
  [deleted]
shit_game 1y ago
It moves the real cost of the additional labor from the prices displayed for items (like you would see in a B&M grocery store) to some tertiary part of the purchase process that is displayed 1) after the used has gone through the effort of app navigation and selecting their purchases and 2) has been through the majority of the purchase funnel and self-selected as a high-prospect sale. This helps keep the listed prices for items in these apps relatively comparable to their in-store listed prices, acting to convince the user the sale is reasonable (similar to online sellers making up for low listed prices with high shipping prices). Moving this additional cost to some tertiary step lessens the impact of goods pricing seeming too high by adding a "small optional fee" at the end of the purchase process that the user is expected to subconciously understand is effectively a bid on labor. I'd imagine the psychology behind it is depressing.
- Eisenstein 1y ago
  That is true. What is also true is that having things delivered to you is not free, and the prices of the goods cannot be same for delivery vs warehousing in a store.
  - pc86 1y ago
    Sure it can. I'm not saying it's free but it's not a foregone conclusion that 100% (or any percent) of that cost must be passed on to the consumer. If a manufacturer/distributor/restaurant is willing to accept lower margins for the increased reach and market access, they will.
    - Eisenstein 1y ago
      It cannot be the case because the business would cease to exist in their current form if they did that. They would close their retail stores and become online only, because there is now zero incentive for anyone to go to the store instead of ordering it and having it delivered.
pc86 1y ago
There is a very clear different from the consumer's point of view between paying a 20% delivery fee with no tip (and realistically having most drivers still expect an in-person tip) and a 5% delivery fee with a tip amount of your choosing (and maybe only 1/1000 drivers expecting/requesting yet more). I have always been a generous tipper and I try to always put myself in that person's shoes when deciding how much to tip but even I notice the psychological difference. If you don't ever think about it, have never had a job waiting tables or dealing with the public, it'd almost be a nonstarter to have a higher delivery fee regardless of tip expectation.
xp84 1y ago
The gready sleazeballs who like the "tipping" system (mostly, restaurant owners) would prefer to pay all their employees $0 and have all diners/customers/etc pay 100% of the wages out of guilt. While 10% was customary in the first half of the 20th century, the standard tip gradually increased to 15% by the 1980s. In 2025 it's not uncommon to see little shortcut buttons for 20, 25, 30%. You can see where this is going. They want us to tip 50% and they pay $0, even though restaurant menu prices are one of the things that has experienced more inflation than other things.
- cafard 1y ago
  When I first had the money to pay for restaurant food ca. 1975, 15% was standard. I think that the Waiter Rant guy considered anything under 20% an insult, about 30 years after that.
- FeloniousHam 1y ago
  Ah yes, the greedy sleazeballs. If you knew that the total cost of the meal would be the same, say $20 for the meal, does it to you matter if: 1) you pay $20 "no tip" and the owner pays non-tip minimum wage, or b) you pay $16.50 for the food and $3.50 separately to the server in the form of a tip ?
  - lcnPylGDnU4H9OF 1y ago
    The problem is that the customer does not know the cost of the meal; they typically rely on the business owner to be upfront about that. Tipping is guilt-motivated drip pricing. The only thing the commenter got wrong is that the restaurateur has to prime the customer with some cost so they can voluntarily add a percentage. https://en.wikipedia.org/wiki/Drip_pricing https://en.wikipedia.org/wiki/Drip_pricing
  - geodel 1y ago
    > If you knew that the total cost of the meal would be the same,.. Huh, why should I know this at all. I read the prices online or in restaurant when I enter in. I will assume that as my cost of food.
  - 1y ago
geodel 1y ago
Different because now list price of a sandwich is $8.99 instead of $14 that customer will actually pay. Hotels, resorts, restaurants, tours etc are master at this. Even after knowing these add-ons people fall for it often enough to keep this practice running. Besides economists think positively of this so it has support not just from interested parties but officials, think tanks etc.

gmadsen 1y ago

psychologically they are very different. Framing the wages as a "tip" moves the conversation to the drivers and users, where users think tips are an out of hand culture problem and drivers view the users as stingy. Then the company sits out of the spotlight collecting their absurd rents

deleted 1y ago
[deleted]

shit_game 1y ago

It moves the real cost of the additional labor from the prices displayed for items (like you would see in a B&M grocery store) to some tertiary part of the purchase process that is displayed 1) after the used has gone through the effort of app navigation and selecting their purchases and 2) has been through the majority of the purchase funnel and self-selected as a high-prospect sale. This helps keep the listed prices for items in these apps relatively comparable to their in-store listed prices, acting to convince the user the sale is reasonable (similar to online sellers making up for low listed prices with high shipping prices). Moving this additional cost to some tertiary step lessens the impact of goods pricing seeming too high by adding a "small optional fee" at the end of the purchase process that the user is expected to subconciously understand is effectively a bid on labor. I'd imagine the psychology behind it is depressing.

Eisenstein 1y ago
That is true. What is also true is that having things delivered to you is not free, and the prices of the goods cannot be same for delivery vs warehousing in a store.
- pc86 1y ago
  Sure it can. I'm not saying it's free but it's not a foregone conclusion that 100% (or any percent) of that cost must be passed on to the consumer. If a manufacturer/distributor/restaurant is willing to accept lower margins for the increased reach and market access, they will.
  - Eisenstein 1y ago
    It cannot be the case because the business would cease to exist in their current form if they did that. They would close their retail stores and become online only, because there is now zero incentive for anyone to go to the store instead of ordering it and having it delivered.

pc86 1y ago

There is a very clear different from the consumer's point of view between paying a 20% delivery fee with no tip (and realistically having most drivers still expect an in-person tip) and a 5% delivery fee with a tip amount of your choosing (and maybe only 1/1000 drivers expecting/requesting yet more). I have always been a generous tipper and I try to always put myself in that person's shoes when deciding how much to tip but even I notice the psychological difference. If you don't ever think about it, have never had a job waiting tables or dealing with the public, it'd almost be a nonstarter to have a higher delivery fee regardless of tip expectation.

xp84 1y ago

The gready sleazeballs who like the "tipping" system (mostly, restaurant owners) would prefer to pay all their employees $0 and have all diners/customers/etc pay 100% of the wages out of guilt. While 10% was customary in the first half of the 20th century, the standard tip gradually increased to 15% by the 1980s. In 2025 it's not uncommon to see little shortcut buttons for 20, 25, 30%. You can see where this is going. They want us to tip 50% and they pay $0, even though restaurant menu prices are one of the things that has experienced more inflation than other things.

cafard 1y ago
When I first had the money to pay for restaurant food ca. 1975, 15% was standard. I think that the Waiter Rant guy considered anything under 20% an insult, about 30 years after that.
FeloniousHam 1y ago
Ah yes, the greedy sleazeballs. If you knew that the total cost of the meal would be the same, say $20 for the meal, does it to you matter if: 1) you pay $20 "no tip" and the owner pays non-tip minimum wage, or b) you pay $16.50 for the food and $3.50 separately to the server in the form of a tip ?
- lcnPylGDnU4H9OF 1y ago
  The problem is that the customer does not know the cost of the meal; they typically rely on the business owner to be upfront about that. Tipping is guilt-motivated drip pricing. The only thing the commenter got wrong is that the restaurateur has to prime the customer with some cost so they can voluntarily add a percentage. https://en.wikipedia.org/wiki/Drip_pricing https://en.wikipedia.org/wiki/Drip_pricing
- geodel 1y ago
  > If you knew that the total cost of the meal would be the same,.. Huh, why should I know this at all. I read the prices online or in restaurant when I enter in. I will assume that as my cost of food.
- 1y ago

geodel 1y ago

Different because now list price of a sandwich is $8.99 instead of $14 that customer will actually pay. Hotels, resorts, restaurants, tours etc are master at this. Even after knowing these add-ons people fall for it often enough to keep this practice running. Besides economists think positively of this so it has support not just from interested parties but officials, think tanks etc.