Gratuities After Checkout Undercuts Food Delivery Worker Wage Increase

[music - Brian Lehrer Show Theme]

Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Just a few months ago, food workers in New York City rejoiced at the victory of a nearly $18 minimum wage for people who deliver your takeout or your delivery orders. Now that that wage has gone into effect, however, some popular apps Uber Eats and DoorDash have dampened the celebration.

How did they do this? Well, if you've ever gotten delivery through one of these apps, you'd know that in the past you would be prompted to tip your driver right before submitting your order, but now the suggestion to tip your deliveries only comes in after you've already paid. The result is a lot of people are forgetting to tip. Why did they make this change? Joining us now to discuss these tipping policy changes and how they're affecting delivery workers is Claudia Irizarry Aponte, senior reporter at the news organization, The City. Claudia, welcome back to WNYC. Thank you for coming on today.

Claudia Irizarry Aponte: Thanks for having me, Brian. Happy to be here.

Brian Lehrer: I gave just the briefest explanation there of the tipping updates at Uber Eats and DoorDash. Was I correct and what else would you add so people understand what's changed?

Claudia Irizarry Aponte: Yes, that's absolutely been the case over the last week. The minimum pay standards for delivery workers mandated by New York City law went into effect last Monday, so a week ago yesterday, mandating an $18 an hour minimum hourly pay rate for delivery workers. This is an amount that takes into account delivery workers' cost of operating. They're independent contractors, so they have to pay for their own bikes, e-bikes. They have to pay for gas, insurance, their own health insurance, and in the case of those who use cars to deliver all the costs associated with their cars. This is an hourly rate that takes into account those operating costs because the companies don't subsidize any of that overhead.

What has happened in the week since is that three of the major food delivery companies DoorDash, Uber, and Grubhub, have changed their tipping policies. What's important to remember is that tipping was always optional. Even when it was the case that customers could tip the moment that they place their order, the moment that they paid, they could choose not to tip if they wanted to or forego tipping on the platform directly in order to pay in cash. What this change does is make it more difficult for the people who do want to pay their tip on the outset from doing so.

Brian Lehrer: Is it just Uber Eats and DoorDash or some of the other delivery apps too?

Claudia Irizarry Aponte: So far it's just been Uber Eats and DoorDash that have completely overhauled their tipping practices. In the case of DoorDash, customers now may only tip once the order has been assigned to a delivery worker, and in the case of Uber, now, customers can only tip after they've already received their food at the door. Grubhub so far has just changed the suggested range for tipping.

Again, those who are familiar with how these platforms work in order delivery, it might be prompted a suggested tipping amount upon checking out. Prior to the law going into effect on Monday, on Grubhub, the suggested tipping amount ranged from somewhere between 15% to 25%. Now, the suggested tipping amount is from 0% to about 15%. Customers are being suggested to tip lower amounts than they were or fewer amounts that they were before the law went into effect.

Brian Lehrer: What's going on here, Claudia? When I first heard this news, I thought, "What are the apps punishing the delivery workers, for having lobbied for a better minimum wage?" Is it just that, is it just retribution, or do the apps actually get something financially out of making it harder and suggesting lower amounts for tipping delivery workers?

Claudia Irizarry Aponte: That's the big question. The companies have claimed this entire time that 100% of the tips that customers pay to workers go directly to the workers' pockets, so changing the tipping platform and overhauling their tipping practices doesn't cost them a dime or is not supposed to cost them a dime, whether the customer is able to do that immediately upon placing the order or after.

Now the company's claim, Uber specifically claims that this is a consequence of the law, that this is just a way to incentivize workers to not pick and choose which orders to pick up and deliver based on what amount the customer tips or doesn't tip, so that whatever the amount the worker sees when the order comes in through their phone is the same for everyone, which is zero until after, theoretically, the end of the order if somebody does tip.

The question is why are the companies pushing back against the so-called cherry picking? These are independent contractors. They theoretically have always had the option to pick and choose which orders they want to pick up or not to pick up. It's a true mystery, just what exactly is in it for them, and if this has any cost benefit to the companies at all, changing this policy.

Brian Lehrer: I want to come back in a minute to what you were just describing how delivery workers can choose which orders to take and deliver. This is something the ordering public is probably completely oblivious to, and it does have some consequences, but first I want to invite listeners in. Are there any delivery workers listening in right now? 212-433-WNYC. We definitely want your voices. If you happen to be out there today, 212-433-9692. How have the updated tipping policies on DoorDash and Uber Eats affected your total take-home pay so far? Are you still celebrating your minimum wage increase now the tips have been tampered with? Does it even out in the end? 212-433-WNYC, or really I should ask, does it become a net plus in the end, which is, of course, the point of the minimum wage increase? 212-433-9692.

If you're a delivery worker, is there anything else you want people to know about your working conditions? Now, if you're not a driver, now is not the time to comment on e-bike usage, which we talk about a lot. Instead, if you're a user of delivery apps, how much do you tip, be real, and when do you tip, and when do you think it's right to be asked to tip? Has moving the tipping prompt to after you've placed your order changed your tipping habits? Have you noticed this yet as somebody who orders delivery on Uber Eats or DoorDash?

Call 212-433-WNYC and tell us if you've noticed and if it's changed your tipping habits at all, 212-433-9692, or anything about how you like to tip for delivery, in advance, only after the fact on the apps and cash, whatever, 212-433-WNYC, 433-9692. Call or text Claudia Irizarry Aponte, senior reporter at the nonprofit news organization, The City.

Claudia, as calls are coming in, let's go back to how it works. When people order for delivery, is it like ordering an Uber to take a ride? The drivers can look at your order, look at how big the order is, look at how far you are from the restaurant, any of those things, and decide, "Well, this is worth it to me to pick up this job or not."

Claudia Irizarry Aponte: What the workers can see on the onset when the request for an order comes in through their phone, and they can reject them based on a whole bunch of different reasons, the information that is available to them at that time with regards to payment and tipping, is they can see the base amount that the company is paying them for that delivery, and they can see also the amount that the customer has already tipped. The worker can pick and choose and determine, "Well, this is a $4 order that is coming," for the purposes of what the company is paying, "and the customer is paying a $10 tip. This is worth me picking up or this is a nice tip amount. Let me just select this order."

Now what's happening with this change, specifically for workers who deliver for DoorDash and Uber, is that the tip amount is showing up as zero for every order because the customer is not able to tip until after the fact. What they're seeing is they're happy they're getting their minimum pay rate, the base wages they have noticed is getting higher, but again, this base hourly wage is meant to boost them, of course. They were earning an average of $11 an hour before tips prior to this law, but it's meant to subsidize their cost of operating, their micro-mobility vehicles, their car insurance, all of these costs. Without seeing the tips coming through it's impossible for them to budget to see if the hour or day's earnings are enough to call it a day and to determine if a delivery is, in fact worth- if the juice is worth the squeeze, so to speak if the delivery is a huge amount of food or products or if it's a long drive or a long bike ride away.

Brian Lehrer: Here's Duke in Jersey City calling in. Duke, it's been a while. Thanks for checking back in. You're on WNYC.

Duke: Hi, Brian. Can you hear me?

Brian Lehrer: I can hear you.

Duke: Okay. I'm preparing my bike right now to go into Manhattan to do Uber. I tuned in when you guys had started the conversation, so I'm not really sure what you're asking, but it sounds as if you're saying why are the apps doing this? I'm surprised you're even asking that question. It's obvious why they're doing it, Brian. They have to get that money back some way. They can't take a loss.

Brian Lehrer: There's my question, Duke, how do the apps make more money by making it harder to tip you after people have decided what they want to eat?

Duke: Okay, Brian, when I started doing this, I never really went in and broke down exactly how I get paid because I was just doing it part-time. I just go out and do it. When you really break down how much the customer pays, how much the app gets, how much the driver gets, and all, when you go and break all of that down, that when you break down the math, that's when you find out how the apps would benefit from this, okay? I know you don't have a lot of time. I just want to make one more point because I listened to your program often and we all know that-- When I started doing this, I realized something, that I became part of a group of people who in this city are considered public enemy number one. Of course, the number one issue is the fear of these deadly batteries.

I want to say something on air to set the record straight and this is something that you never allow people to say, The City never says it. They wouldn't be selling these bikes if they were totally an explosion just waiting to happen. The majority of these bikes, if they have a UL certification with the battery, are completely safe. When you hear about these fires and they're showing you how the batteries just explode, this is some type of manipulated battery that the person who owns the bike, for whatever reason, has chosen to use, either he couldn't afford to buy a proper battery because the batteries cost at least $500 or $600 for a brand new one, or that's really the only reason. It [sound cut]

Brian Lehrer: Yes, but I don't even think that that's inconsistent, Duke, and I know we're getting off tipping it onto batteries here for a minute, but not even inconsistent with what we've described on the show, that a lot of people who are struggling to make a living as delivery workers with the e-bikes might take advantage of an aftermarket battery or something like that, which is not going to be as safe as the new batteries, the brand name batteries. There are financial reasons that people do that. I think that's exactly what you're saying.

The solution, perhaps, tell me if you agree, what's come up on the show before from other guests, is that the solution should be systemic. For example, the apps being responsible for providing new batteries or The City as they've started to do, having battery trade-in points or things like that to ensure there's systemic safety because there have been many fires. 18 people, according to the FDNY, have been killed in New York City this year from e-bike battery fire. Something real is going on, but Duke, you get one more say. Go ahead.

Duke: Brian. Everything you just said makes sense. My only point is that the fear that has been put into the public. When I come into my building now, because I own one of these bikes. My own neighbors look at me like I'm a risk. The public messaging just has to be different. It has to be put out there in a different way. In terms of the bottom line with you talking about money, these guys make so little money, Brian. Unless you're spending 10 hours a day out there on the street in all kind of weather, you're making, virtually-- I don't know how they're surviving. Forget about taxes. Remember, they have to pay their taxes. [crosstalk]

Brian Lehrer: Right. These are on the books.

Duke: Yes, the majority of these guys, I don't know how they're doing it. They're getting around paying the taxes some way, but they make such little money, Brian. It's just sad to see with these guys- it's like slavery.

Brian Lehrer: Duke, I hear you. Thank you very much. I'm going to go for time, but keep calling us. Of course, getting back to our guest, Claudia Irizarry Aponte from the news organization, The City. Of course, that's why, to Duke's final thought, there was the minimum wage increase to about $18 an hour just now or just recently. Do you happen to know what the average, if there is such a thing as an average, or typical food delivery worker does make on a shift?

Claudia Irizarry Aponte: Well, now that the law's in effect the minimum is $17.96 an hour, just minimum without tips. Prior to the law going into effect, it was about $11 before tips. Again, that's $11 that's going into workers' pockets, but also towards all their operating costs, and even that $11 was far below the minimum wage. This law was really designed to lift up this class of workers to their peers who are Uber and Lyft drivers, who also have their own minimum pay standards in the city, cab drivers and other hourly wage workers who, of course, in this city, the minimum is $15 an hour.

Brian Lehrer: I'm not sure I really got from the beginning of Duke's call the connection that he was asserting between making it harder to tip since this minimum wage went into effect, at least for DoorDash and Uber Eats delivery services and those services making the money back that they now have to pay extra because of the new minimum wage. Is it clear to you why it's in the financial interest of those apps to decrease the amount of tips that workers get or to make it harder to tip?

Claudia Irizarry Aponte: It's a good question because again, according to the apps themselves, every single cent that customers pay towards tips goes directly into the pockets of workers. They don't pocket any of the tips that go to the delivery drivers. It's unclear what they gain just by changing the tipping practices. I'm interested in what other workers have to say. Of course, they're the experts in this, and the companies, there's the argument that by disincentivizing tipping, customers may be more willing to return to these platforms because the cost for ordering delivery are higher now that the minimum wage standards are in effect, and all of these things.

Again, tipping was always optional. People have always had the option to not tip if that's what they wanted or to forego tipping on the platform in favor of tipping in person. They could put the dollar amount on the app for the tip of zero and just give the delivery worker a couple of bucks in cash when they show up at their door. It really is a mystery why this is happening when this is something that really has always been optional to customers.

Brian Lehrer: Yes. A good percentage of the callers on our board and the text messages coming in are from people who don't even believe that the drivers get these tips when you tip on the app. That the app companies actually keep them. You say that they say that's not true. Is it provable?

Claudia Irizarry Aponte: I've certainly heard directly from a lot of delivery workers and have seen the receipt that show that they don't really get the full tipping amount that's reflected in what the customers pay and what they see at the onset of delivering the order, but the company's line this entire time is that every single cent that customers pay towards tips goes directly into worker's pockets. It's just another example of the experience of delivering not exactly matching up in many cases with the information that the companies put out. Every case is different and every company is different.

Brian Lehrer: Here's a text from a listener who says, "Here's why companies are doing it. Drivers sometimes leave behind orders where people don't tip an amount they believe makes the order worth their while. The customers have been complaining about it. Now, making tips invisible to the drivers, they can't leave orders behind based on the tip amount." I think you were trying to explain something like that earlier-

Claudia Irizarry Aponte: Yes.

Brian Lehrer: -which I guess makes a certain rational sense from the app company's point of view, but wasn't it always like that?

Claudia Irizarry Aponte: Exactly. It's always been optional. The customer chose not to tip on the onset of the onset of placing the order, that amount was always going to show up as zero. This is what a lot of the company called "cherry-picking." Again, these are independent contractors. They theoretically should-- They're their own bosses. That's the line that these companies use to recruit and to attract workers to deliver for their platform. If you're your own boss, you should have the agency to pick and choose what jobs you want to do and for what reason without being punished. That just calls into question for a lot of these workers, and certainly, for a lot of customers who have reached out to me complaining about like, "Hey, this changed. Why is that the case? Why are the companies doing this? Am I wanted to tip when I wasn't able to?" It calls into question that practice.

Brian Lehrer: Does your reporting indicate that that's been a problem, that there are people who put in orders that they can't get delivered because no driver wants it?

Claudia Irizarry Aponte: That specific scenario, I have not come across or people have not reached out to me presenting that exact scenario actually playing out in real life. Well, first of all, it's been just a week and a day since the pay rate's been in effect, so it is still too soon to tell what impact this has had already. I have heard from delivery workers who are saying that tips have just plummeted since the law went into effect because of these changes by the companies. I've heard from customers who are frustrated because they want to pay delivery workers when they place the order so it doesn't become an afterthought.

They're like, "Hey, I wasn't presented with the option to tip" or "DoorDash doesn't let me tip anymore. Why is this happening?" People have certainly noticed. People have certainly taken notice. The long-term effects of this change by the companies remains to be seen and the city commissioner for the Department of Consumer and Worker Protection, which is the city agency tasked with enforcing this rule, has already said that the city is looking into this change by the companies as a result of the law going into it.

Brian Lehrer: Again, the tips were never mandatory, it's just where you get first asked for a tip in the process of ordering. Here's another driver, Trey in Garden City. You're on WNYC. Hi, Trey.

Trey: Hey, I'm a passenger. I'm sorry if there's a little sound on the track, the person driving. I would say that there's another app called Point Pickup. They're from Connecticut. These guy's customers would say that they leave a tip in the app and you would never see the tip. There have been drivers complaining for weeks, they wouldn't pay you. It would say that your payment is on pause.

I had to go to Connecticut for these guys and they scolded the security guy downstairs, why did he let this person up? They find everything-- You have to only email them. After I showed up at their office and they scolded the security guy, that's when they finally released my payment, and stuff. It was $1,200 they owed me for two weeks of part-time work. This is a recurring step that drivers have with them. They don't give you your tip and they withhold your pay for weeks when they're supposed to be paying you every week.

Brian Lehrer: That's not Uber Eats or DoorDash, the two we were talking about previously in the segment, just to be clear. That's that other app that you named that I'm less familiar with. Are you familiar, Claudia, to Trey's story? Have you heard other anecdotes or even organized complaints about drivers having to somehow pressure the apps to get the tips that people have submitted?

Claudia Irizarry Aponte: Yes, absolutely. Thank you for-- I was not familiar with that company either, so I'm calling it a tip, no pun intended. That certainly has been the case, a group of DoorDash workers, actually, are suing the company here in New York through the Department of Consumer and Worker Protection, alleging wage theft, claiming that the company is withholding wages by canceling accounts unilaterally.

There's a whole host of reasons why this happens and a lot of workers claim that when the company locks them out of their accounts or closes their accounts, they withhold the amount of money that they earned for that pay cycle and don't pay them. That has certainly been a persistent problem that the city is investigating in those cases. Sorry, I said that these workers are suing the company, saying that they filed complaints against the company through the DCWP. That is certainly something that has come up and that I've reported on and come across in my reporting.

Brian Lehrer: Neil in the Bronx. You're on WNYC. Hi, Neil.

Neil: Hi, there. Thanks for taking my call. Just a quick point here. Over the last several years, there have been a number of different proposals put forward largely by the delivery themselves about ways in which the city could more effectively regulate these apps, which it has totally the constitutional and legal ability to do. The City Council has stopped short of requiring licensing for these delivery app companies. What that has meant is that there isn't really a sufficient level of regulation both in terms of business practices, as well as labor practices.

Were the city to actually take that type of action, which it can do, it could require all sorts of things, clear disclosures to consumers and to workers about how every single cent of every single order is actually being spent, who gets what, how much does the restaurant get, how much does the delivery person get. It's really the obfuscation of how every single cent and dollar of the consumers is spent that has allowed for the app companies to essentially not disclose how much workers are truly being paid, what their profit is, how much restaurants are making, et cetera.

It's in that environment that they've been able to continue to make a huge amount of money on the backs of consumers, and obviously, workers. In this particular instance, so we don't know exactly what the motivation is, it seems relatively clear that this is an action that's being taken by the apps in retaliation for an enormous amount of organization organizing that's taken place in the last several years and very effective organizing, I may add. Something for the city to consider moving forward.

Brian Lehrer: It does look to you, with your experience in the field, it sounds like that it's just retribution. There isn't even any real financial gain here for the apps. That's your impression. Do you have any impression, and then I'm going to ask Claudia, and then we're out of time, why it's just DoorDash and Uber Eats doing it? It doesn't seem from the reporting like it's Grubhub, Seamless, others.

Claudia Irizarry Aponte: You know, these are just--

Neil: I couldn't tell you that.

Brian Lehrer: Neil, do you have a take? I guess not. Claudia, go ahead.

Claudia Irizarry Aponte: Excuse me. He's bringing about that. The companies, these are their own business practices. Again, part of what Neil was saying that there is no sort of regulation or rating in of these companies and the city allows this to happen. Of course, they're free to do this, giving the current arrangement that they have with these workers, which is that they're independent contractors and not employees, which is a big factor into why these pay standards had to be legislated in the first place, something that a lot of the workers who are organizing with the delivery says, and certainly, a lot of advocates and leaders in the labor movement want to eventually see for these workers, and also, for Uber, Lyft drivers, and all workers toiling in the gig economy, is the recognition that they're not independent contractors, that they're employees, and that they should be covered under all the legal and federal protections that employees have in this country from a minimum wage to workers comp and beyond. As one of the callers noted earlier this hour, a lot of these workers do this full-time and as their primary, and only source of income. This is their only job. They put in 40-plus hour weeks. Many of them believe that they are employees and should be recognized as such.

Brian Lehrer: We leave it there with Claudia Irizarry Aponte, who has been writing about the delivery workers, the tips, and the apps, and the minimum wage for the non-profit news organization, The City. Claudia, we appreciate it. Thanks a lot.

Claudia Irizarry Aponte: Thank you so much.

 

 

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