After being caught in a massive fire following reports that DoorDash is not paying their “dashers” or deliverymen the tips given by their customers, the CEO of the company have said that they are changing their policy and will make sure that the earnings of their employees “will increase by the exact amount a customer tips on every order.”
DoorDash has been riddled with backlash, following the first-hand account of a journalist detailing how the delivery app is “stealing” their dashers’ tips to pay for their salaries. In an article penned by Andy Newman, DoorDash was discovered to be cutting off the tips given by users and is using them to cover up portions of their supposed minimum earning for a delivery.
“If the woman in the bathrobe had tipped zero, DoorDash would have paid me the whole $6.85. Because she tipped $3, DoorDash kicked in only $3.85. She was saving DoorDash $3, not tipping me,” Newman wrote.
Following the publication of the article, DoorDash’s Chief Executive Officer, Tony Xu, immediately announce that they are changing their policy. In a post on his official Twitter account, Xu said that the new policy would be “announced in the coming days.”
“Going forward, we’re changing our model – the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days,” he wrote in his Twitter account.
According to Xu, his company misunderstood what customers mean with their tip. He claims that the current payment model for his company was meant to make sure that without a tip, their dashers would still be paid the minimum earning for the delivery, adding that “what we missed was that some customers who did tip would feel like their tip did not matter.”
Tony Xu, who leads the company, has been proud that their current payment model is the result of years of research and consultations with their dashers. “We built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible,” he insists.
However, the current backlash to the company has forced them to develop a new model that is different from what they are using now, which the app version of a “tipped wage.” This is a predatory business practice where employers are paying their workers below minimum wage and relying on tips to cover up the rest of what they owe from their laborers.
Amidst the growing concerns regarding the business practices of certain tech-based companies, the industry is still growing by the day. But that is also because of the changing culture among users who now value convenience and price over other things.
A recent study revealed that Americans, on average, will have food delivered to their houses at least three times a month. According to 2019 Food Delivery Statistics, a whopping 95% of all of those who are having their food delivered to their doorstep is tipping the delivery person regularly, with some of them varying the number of tips based on the weather.
While Americans are more than willing to tip the person who delivered their food, most of them said that they would not be spending more than $8.50 for combined fees and services. Moreover, nearly half of Americans also believe that people who deliver, like dashers, deserves more tips than in-restaurant servers, citing the risk they go through while driving and the work they need to get done in order to deliver their ordered food safely.
These numbers only highlight how the tipping culture has been ingrained in the American consciousness, and sometimes, employers are exploiting this culture to the detriment of their employees. In the end, the tale of DoorDash is a reminder that the world is watching companies and will always call them out for policies that exploit their workers.
It also highlights the need for labor laws to protect those who work in alternative jobs – like the dashers – which can be subject to exploitation by their employers. While labor codes are there to protect their employees, tech-based companies would always find a loophole if they decide to violate it, that’s why it is necessary for these laws to be updated to encompass both online and offline industries.