There was controversy in the past with DoorDash effectively pocketing the tips (https://abcnews.go.com/Technology/wireStory/dc-attorney-gene...) which makes me wary about tipping in these apps -- are InstaCart and Amazon doing the same?
Something strange by the way, is that tipping is variable. Eg my ~$110 order yesterday automatically tacked on a $7 tip, my ~$50 order of three days had a $5 dollar tip automatically added. Anyone have an idea how they are calculating this?
If I remember correctly, the prior controversy was that DoorDash (or whomever) would give them the tip 100% but then take an equal or weighted portion from the company's contribution.
Company tells the worker a delivery pays $15, you tip $5, the company reduces their portion to $10, the worker gets $15 total. You tip $10? The company pays $5, worker still walks away with $15.
Which makes sense, as the quantity is what actually matters to the delivery person.
- We will pay you $X
- We will make sure you make at least $Y
If you make the wording changes
- $X == <wait staff minimum wage>
- $Y == <normal minimum wage>
Then it becomes clear that this is exactly how restaurants work; with the caveat that it's per delivery instead of per hour.
(1) Drivers are paid in 2 factors, a tip provided by the user, and a per delivery fee provided by doordash thats variable, and generally in the industry is between 10 and 20% of the basket cost
(2) doordash additionaly guaranteed a total "minimum compensation" per delivery up front that was like ~20% of the cost of the basket
(3) Doordash would use the tips users paid to offset the amount they would pay drivers in order to meet the "minimum comp guarantee", so if you ordered 100 dollars in food, and tip 20 dollars, and the minimum compensation on the order was 20 dollars,doordash would pay the driver nothing, and your whole tip would sub for driver pay. If instead you tipped 0 dollars on your 100 dollar basket, doordash would pay the driver 20 dollars out of its own funds to meet the minimum comp. Likewise if you tipped 10 dollars, doordash woud pay 10 dollars.
Amazon I believe tends to do everything through third party companies and there really isn't tipping with Amazon as far as I know, but that might have changed since I haven't ordered an Amazon Fresh order in ages. From other comments here, it sounds like they now having tipping.
In other words, you don't know. I agree with you that they shouldn't be scummy about this but I don't think it's fair to make up that they are.
https://www.reddit.com/r/AmazonFlexDrivers/comments/9ji1af/p...
"Amazon will never disclose any information about specific deliveries beyond what you see in the app before and after the delivery. They will not tell you who tipped or how much. The only ways to tell if a customer tipped are cash tips and blocks with only one order completed, including instant offers, for which the earnings exceed the initial offer."
"If an offer shows a pay range, the base rate is never more than the low end of that range. For example, if you accept an offer for a 2 hour block with pay of $36-50, anything you earn for that block beyond $36 is from tips."
"Amazon does not technically steal tips, but the end result is the same as if they did. They call it variable base pay. They state in the contract that 100% of tips are passed on to the driver. This is true. However, they often lower the base rate enough so the net earnings is the minimum stated in the block offer. Think of it like a piece of string. The entire length of the string is your earnings. The right side of the string is tips and the left side is base pay. They promise never to cut the right side of the string. They cut the left side instead. It still results in a shorter piece of string."
"If the base pay plus tips ends up being more than the offered pay for the block, you will get paid the full amount. So if you accept a 2 hour block for $36-50 and get $55 in tips, you will be paid at least $55. They don't lower the base rate on every block and they don't always lower it the same amount. They say it's based on demand. For a 2 hour block, after tips, you might be paid $36 or you might be paid $80. It just depends."
"I'm not sure how Amazon determines the suggested tip for orders that include tips. I just played around in the Prime Now app and it seems like the suggested tip is a percentage of the total item cost, before shipping and tax, but is a minimum of $5. Customers can, of course, change it to whatever they want."
Here's a question for people who were so upset by this. Let's say you have a bunch of tipped employees that you directly pay $10/hour and with tips they average $20/hour. You have two problems though, (1) your employees complain that during some shifts they are making barely over their base pay and (2) potential new hires are worried that they won't make as much in tips as you say current employees make. The question is: would it be taking advantage of those employees to change the employment to include a guaranteed $15/hour minimum, for any shift where they make less than that you'd pay them extra to hit the minimum?
The comparison to DoorDash isn't table service in a restaurant, it's ordering food for delivery to your house and then giving cash to the driver. Where does that cash go? The driver's pocket. That process & the cultural understanding of it has literally been around as long as the concept of tipping.
Here's the real question that answers why people are "upset". If you did a poll of 100 people ordering on DoorDash, and asked them "when you tip on your order, where does the money go", what do you think people would say? 99/100 of them would ABSOLUTELY say "to the driver" and that is everything that is wrong with what DoorDash did. I struggle to engage sincerely in argument with anyone claiming otherwise.
How is that different from servers in a restaurant? If you asked that question of people who give a tip to their servers at a restaurant they would also say that that money goes to their server, despite the fact that the federally mandated earnings guarantee (assuming the restaurant doesn't have its own higher one) means that that money, effectively, might just be going to the restaurant.
> it's ordering food for delivery to your house and then giving cash to the driver
And would you be upset if Domino's gave an earnings guarantee to their drivers?
I fail to see how that is relevant. I think the closest comparison to DoorDash is ordering delivery from an Italian restaurant – not driving to the restaurant, sitting down at a table and getting table service. And yes, I think many people are aware that it is common for kitchen staff to pool tips at a restaurant, in the same way that they know the same process doesn't exist for delivery drivers.
>would you be upset if Domino's gave an earnings guarantee to their drivers?
I would have no problem with that, but if they have a button on their app that says "tip your driver" it had better all go to the driver.
If Amazon is promising to pay you at least $36, then the "base pay" must be $36 - that's what you'd be getting if there was $0 tips - and either you're getting all the tips (i.e. if there's any tips, you're paid more than $36), or Amazon is lying and stealing tips (i.e. if there's $2 in tips, they reduce ("steal") your base pay to $34 so you're still paid just $36).
I'm not sure where you got the idea that that is what I was talking about?
Do you not understand what an earnings guarantee means in the context of a tipped job? It means that you have a base pay + tips. If those tips end up not meeting the earnings guarantee, the company will pay you extra to hit that guarantee. That effectively means that the first $x of your tips are going to the company to cover the earnings guarantee. That's what doordash (and most restaurants) are doing.
The US federal minimum wage laws require a minimum wage of $7.25/hour. Tipped employees only require a base rate of $2.13/hour but the employer must guarantee that they earn $7.25/hour w/ tips, if they make less, the employer must pay them the difference. Effectively, the first ~$5/hour of tips goes to the employer.