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Home / Business / The tip for your person delivering food can actually help a large company

The tip for your person delivering food can actually help a large company



DoorDash is the latest service to review its tip guidelines, according to a New York Times report that re-focuses on the issue. A reporter spent time as a deliverer, showing how customer tips contribute to pay for workers, a policy that has been in place since 2017.
Tweeted in response to the article's backlash Tony Xu, CEO of DoorDash The policy would change in the future, and Dasher's income would increase by exactly the amount a customer tipped gives.

"We thought we were doing the right thing by completing Dasher when a customer did not leave a tip, we missed that some of the customers who tipped had the feeling that their tips did not matter," Tweeted he.

The debate over the role that gratuities play in a person's income is not new, but has been reinforced by the gig economy, which is increasingly criticized for how it deals with workers and how well they are paid. Food suppliers are also under pressure to keep costs down if they want to go public or become profitable. For companies that want to improve their finances, tips are a tempting pot of money.

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In recent years, companies like DoorDash, Amazon, and Grubhub have encouraged customers to leave tips, but they In the opinion of tips experts often do not reach workers in the traditional sense.

In some cases a large tip contributes to a payment that is already guaranteed to workers. The exact details vary depending on the company. A worker can be guaranteed $ 15 for a delivery or an hour's work. If their base salary and customer tip reach $ 12, the company will spend the additional $ 3. However, if the customer left a large tip and pushed the total payment above the $ 15 threshold, the company would not have to raise additional money.

The practice is legal, but violates the tradition that tipping a worker would not otherwise be the case.

Tipping specialists say consumers are unlikely to know that in some cases a generous tip will save businesses money.

  A man delivers food in New York. (Jewel Samad / AFP / Getty Images)
Instacart competing with DoorDash, Amazon Prime Now and Grubhub ( GRUB ) gave a similar practice following criticism in February. Other platforms for delivery of food such as Eats, Postmates, and Caviar do not contribute to paying workers with tips.
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According to Eli Wilson, a professor of sociology at the University of New Mexico, who has been tipping, subsidizing worker wages with tips is affecting millions of employees outside the gig economy.

Restaurant operators are Generally, state and federal laws allow employers to pay a lower minimum wage, when workers regularly receive tips.

According to Wilson, the gig economy has heightened the trend for employers to use tips rather than wages as these companies try to relocate risk to workers and employees by relocating costs to customers.

"This is a very slippery slope," Wilson said. "In this context, another dose of worms will be opened that will allow employers to use them as a substitute for wages when workers' incomes are not particularly high."

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Asked about the tip guidelines, Grubhub states that 100% of the tips are in addition to their salary to the drivers. Amazon said workers receive 100% of gratuities. Their basic salary varies, but they always get at least $ 18 an hour.

However, the practice is confusing because even though all the tips go to a driver, this does not mean they will see a change in their wages. Also, the payment structures sometimes change, which baffles the workers.

Sean, a gig economy worker who demanded that his full name not be used for fear of retaliation by Amazon, noted in the spring of 2017 that his income fell by about $ 175 a week. He turned to Amazon and inquired about changing his tips. (He was not sure because Amazon's claims do not reveal how much tipping contributes to income.) He was told that Amazon has recently introduced "variable basic income," the share of total direct income paid by Amazon.

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In the letter, Amazon has only partially described how "Base Variable Earnings" are calculated. Factors include the shift duration and the need for deliveries, which are determined before completion of the work. Amazon also adds "additional revenue" to fulfill the promise that drivers will earn $ 18 to $ 25 an hour. The letter does not tell how Amazon calculates the additional revenue and whether the total revenue is $ 18 per hour, $ 19 per hour or more.

Consumers are also left in the dark, as Amazon and Grubhub guarantee certain payments to employees in some markets. If customers are more generous with tips, companies will have to pay less to meet the minimum requirements.

"It certainly will not come to me in a way I believe a customer believes it comes to me," said Morgan Aycock, a gig-economy company sometimes located in Charleston, South Carolina, for Grubhub drives, in terms of tips. "Sure, that's a bit dodgy, until it becomes the norm – when it becomes the norm."

If a driver makes many orders, he should stick to the hourly minimum, which in some cases corresponds to a guaranteed payment of $ 12, and the Grubhub payment to them will not be affected by how much the tip is.

When a customer places an order with Grubhub, he is not told if there are any hourly minimums on his market and if his driver has met or is likely to hit them without the help of a tip. This makes it impossible to know if Grubhub's tipping subsidizes its own payment to the driver or represents an additional payment to the driver.

  Food suppliers are confronted with the verification of pay of workers. (Jewel Samad / AFP / Getty Images)

Grubhub stated in a statement that drivers are paid on an order basis and occasionally receive a "true-up bonus", (Jewel Samad / AFP / Getty Images) if the drivers do not have enough orders to keep Grubhub loyal.

Grubhub states on pay slips, tips and what they pay, and Amazon does not give tips and leaves drivers in the dark about how much they are tipping And how much of the $ 18 per hour they are guaranteed to come from Amazon and Amazon did not reveal how payment, other than tips, is made Amazon says it averages over US $ 19 Dollars per hour to pay for a shipping partner, and that shipping partners earn $ 18 to $ 25 per hour.

The company does not open its practice of subsidizing guaranteed tip payments recognized. However, people who identify themselves as Amazon drivers have reported the practice on social media. A Los Angeles Times investigation earlier this year revealed that Amazon used tips to cover its guaranteed pay. An Amazon spokeswoman declined to comment on the report.


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