There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
It's still fraud.
You're paying extra money to door dash for nothing.
I might voluntarily pay an extra $5 to the driver, an actual human who I respect.
Why would I pay an extra $5 to the faceless corporation? They should be getting their cut already though fees and price inflation.
Like, if it was labeled "service fee" but you got to fill in the number it'd be zero every time.
But again, every time you tip an employee in the 43 states that allow employers to take the tip credit, you are doing the same thing.
You are leaving money on the table. And the employer is taking $5.12 per hour out of that money, every hour, every shift, for as long as the server works there. On a slow night when you tip your server are you actually sure that they got to keep any of that money? Or did the perfectly legal, normal, and common tip credit grind most of it away? You have no idea.
The tip credit being based off of pay period, and door dash being per delivery, makes the two systems pretty different, for the benefit of doordash.
You’re like the third person to claim this, and I don’t see how this is true at all. Doing it per-delivery means that any large outlier tips actually go mostly to the server, while any stiffs still pay minimum. Whereas the standard tip credit let’s a restaurant, in theory, gnaw on a large tip for two weeks if necessary to ensure the restaurant gets to claim their full tip credit.
If I get a $100 tip on DoorDash, followed by nine stiffs, I still kept like $94 of that tip *and* got the $7 or so of the minimum on all the rest as well.
If I make $100 in tips this hour at a restaurant, and make $0 in tips for the next ten hours I work that pay period, the restaurant will continue counting that $100 tip across all those hours, keeping $51.20 of it.
DoorDash’s system actually caps the amount of each tip that can be credited toward the guaranteed minimum. If they wanted to do it like a restaurant, they’d amortize the tips across all guarantees, and only pay out if *all* your combined tips exceeded *all* the guaranteed combined. That would be much, much worse.
DoorDash’s use of a per-delivery credit system seems to favor the driver.
There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
If they have the guaranteed rate of $7, and you tip $4, they do not get that $4. The first $X (up to $6 in this case) of the tip go to DoorDash, and then they release the rest to the driver, so if you paid $14 in total, $1 of that $7 of tip you paid would be the drivers.
If any amount of the tip is taken by DoorDash and not the driver, that is fraud to the consumer. Tips have legal definitions in the US, and may only be gotten around with specific mechanisms I've already defined like four times now on other pages.
There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
It's still fraud.
You're paying extra money to door dash for nothing.
I might voluntarily pay an extra $5 to the driver, an actual human who I respect.
Why would I pay an extra $5 to the faceless corporation? They should be getting their cut already though fees and price inflation.
Like, if it was labeled "service fee" but you got to fill in the number it'd be zero every time.
But again, every time you tip an employee in the 43 states that allow employers to take the tip credit, you are doing the same thing.
You are leaving money on the table. And the employer is taking $5.12 per hour out of that money, every hour, every shift, for as long as the server works there. On a slow night when you tip your server are you actually sure that they got to keep any of that money? Or did the perfectly legal, normal, and common tip credit grind most of it away? You have no idea.
No, this is nothing at all like tip credit. Tip credit, the consumer gives a tip to their service person and every dollar of that goes to them, 100% of the time. If I tip the guy $5, they get that $5. Then at the end of the month, the company fills in the gaps. That's a problematic system as well, at times, but is very different from what is happening here. Doordash has an agreed upon rate for the driver, but takes the tip 100% of the time. The customer is led to believe they are doing the same thing, but they are not.
But if you tip $5, then at the end of the month the company fills the gap, all that $5 did was impact the amount that the restaurant has to pay, is the thing. The restaurant employee isn't making any more or less than the minimum based on your tip, if they don't make enough to exceed the minimum. So yes, anytime an employee has to utilize the minimum wage tip credit laws, ALL of their tips are simply subsidizing the amount that the business has to pay out, at that point.
Now obviously serving tables generally pays better than DoorDash, which is another matter entirely. That’s where “fuck the gig economy” comes in. But how they deal with tips doesn’t seem to be the issue.
If anything, as with cabs and package delivery, it’s more to do with people not wanting to be honest with what it really costs to deliver hot meals to their door, and pay a fair price for that service. These companies just enable that fantasy.
+4
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EncA Fool with CompassionPronouns: He, Him, HisRegistered Userregular
edited July 2019
Tip credit is incredibly problematic, this is true. I'm not claiming otherwise! But it isn't fraud to the consumer. Doordash's system is, which is why they are removing it once the light of day shone upon it.
In an ideal world, as someone who has served and bartended, my ideal situation would be that all wait staff get paid a livable wage and be able to keep their tips, with back of house getting paid slightly/significantly more (by role) than front-of-house to cover their ineligibility. Cut the crap tricks and just pay people well. If you keep good staff this way, you have less turn-over, better retention of regulars and service, and generally a fuller house to make more profit off of. Lots of chains already operate this way, and their market share seems to reflect that.
There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
If they have the guaranteed rate of $7, and you tip $4, they do not get that $4. The first $X (up to $6 in this case) of the tip go to DoorDash, and then they release the rest to the driver, so if you paid $14 in total, $1 of that $7 of tip you paid would be the drivers.
If any amount of the tip is taken by DoorDash and not the driver, that is fraud to the consumer. Tips have legal definitions in the US, and may only be gotten around with specific mechanisms I've already defined like four times now on other pages.
There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
It's still fraud.
You're paying extra money to door dash for nothing.
I might voluntarily pay an extra $5 to the driver, an actual human who I respect.
Why would I pay an extra $5 to the faceless corporation? They should be getting their cut already though fees and price inflation.
Like, if it was labeled "service fee" but you got to fill in the number it'd be zero every time.
But again, every time you tip an employee in the 43 states that allow employers to take the tip credit, you are doing the same thing.
You are leaving money on the table. And the employer is taking $5.12 per hour out of that money, every hour, every shift, for as long as the server works there. On a slow night when you tip your server are you actually sure that they got to keep any of that money? Or did the perfectly legal, normal, and common tip credit grind most of it away? You have no idea.
No, this is nothing at all like tip credit. Tip credit, the consumer gives a tip to their service person and every dollar of that goes to them, 100% of the time. If I tip the guy $5, they get that $5. Then at the end of the month, the company fills in the gaps. That's a problematic system as well, at times, but is very different from what is happening here. Doordash has an agreed upon rate for the driver, but takes the tip 100% of the time. The customer is led to believe they are doing the same thing, but they are not.
But they don't (didn't?) keep 100% of the tips, they kept the guaranteed minimum and passed along the excess.
Assume M == $5
If you made 10 deliveries, and
- all 10 tipped $5: you made $50
- all 10 stiffed you: you made $50
- all 10 tipped you $7: you made $70
- 9 stiffed you and one tips you $25: you made $70 (5*9 + 25)
The net result is that you always get at least your tips; the only variance is whether DoorDash got you to work for them for free*.
Tip credit is incredibly problematic, this is true. I'm not claiming otherwise! But it isn't fraud to the consumer. Doordash's system is, which is why they are removing it once the light of day shone upon it.
I’d argue it’s equally fraud. If only because so many consumers don’t really understand how it works. When I write a tip in on my Chili’s receipt, I actually have no idea how much of that tip is going to the server, and how much is going to Chili’s in the form of the tip credit. At all. It could be that Chili’s got the whole thing.
So far the only real argument contradicting this is that the tip credit is moot because “oh restaurants would never pay the full minimum anyway, they’d fire any server that tried to get it.” This is worse!
I don’t think many customers at all consider that some or all of the money they tip their server is, legally, going to the owner of the restaurant. So yeah, the fraud is quite similar.
mcdermott on
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EncA Fool with CompassionPronouns: He, Him, HisRegistered Userregular
Its equally bad, but not fraud to the consumer. That's pretty well detailed out in federal law.
There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
If they have the guaranteed rate of $7, and you tip $4, they do not get that $4. The first $X (up to $6 in this case) of the tip go to DoorDash, and then they release the rest to the driver, so if you paid $14 in total, $1 of that $7 of tip you paid would be the drivers.
If any amount of the tip is taken by DoorDash and not the driver, that is fraud to the consumer. Tips have legal definitions in the US, and may only be gotten around with specific mechanisms I've already defined like four times now on other pages.
There's one area I'm still murky on because I've seen conflicting answers posted in various places: what happens when the customer tips more than the amount that DoorDash guarantees to the driver? For example, the order pops up in the driver's app with a guaranteed rate of $7, but I tip $11. Does the driver get the whole $11 in that case, or just the $7?
If they're getting the entire amount, I'm not seeing this as fraud at all. What it looks like to me is that DoorDash is effectively guaranteeing a certain tip level to take an order to ensure that drivers aren't getting stiffed by deadbeats. They're telling their drivers that no matter what, they will get at least $7 for this order. If the customer doesn't tip at all, we pay $7 and it all comes from us. If they tip $3, we pay $7 and $4 comes from us. If they tip $7 all is good. If that's the case, this is a way better system than was in place when I delivered pizzas - $2 per delivery, plus tips. Get stiffed by a deabeat? Too bad, you get your $2 and that's it. Get undertipped all night? Well, good luck making rent this week.
The question to me really is whether the driver gets the extra when a customer tips more than the guaranteed amount. If it does go to the driver, I have no problem with this system. If it's being pocketed by DoorDash then, yes, there's some fraud going on here.
It's still fraud.
You're paying extra money to door dash for nothing.
I might voluntarily pay an extra $5 to the driver, an actual human who I respect.
Why would I pay an extra $5 to the faceless corporation? They should be getting their cut already though fees and price inflation.
Like, if it was labeled "service fee" but you got to fill in the number it'd be zero every time.
But again, every time you tip an employee in the 43 states that allow employers to take the tip credit, you are doing the same thing.
You are leaving money on the table. And the employer is taking $5.12 per hour out of that money, every hour, every shift, for as long as the server works there. On a slow night when you tip your server are you actually sure that they got to keep any of that money? Or did the perfectly legal, normal, and common tip credit grind most of it away? You have no idea.
No, this is nothing at all like tip credit. Tip credit, the consumer gives a tip to their service person and every dollar of that goes to them, 100% of the time. If I tip the guy $5, they get that $5. Then at the end of the month, the company fills in the gaps. That's a problematic system as well, at times, but is very different from what is happening here. Doordash has an agreed upon rate for the driver, but takes the tip 100% of the time. The customer is led to believe they are doing the same thing, but they are not.
But they don't (didn't?) keep 100% of the tips, they kept the guaranteed minimum and passed along the excess.
Assume M == $5
If you made 10 deliveries, and
- all 10 tipped $5: you made $50
- all 10 stiffed you: you made $50
- all 10 tipped you $7: you made $70
- 9 stiffed you and one tips you $25: you made $70 (5*9 + 25)
The net result is that you always get at least your tips; the only variance is whether DoorDash got you to work for them for free*.
*($1)
They 100% of the time take the tip to cover their costs and incentives and leave you only with the excess, per delivery. If I pay a tip through doordash, some amount, if not all of it, will be kept by administration. Which is 100% fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason drivers still picked up deliveries, but that doesn't change the nature of the scam to the consumer.
Honestly I would put the expectation of the average consumer knowing federal tipping law and the expectation for knowing doordash's tipping policies to be about the same. Unless you've been impacted by it, you probably have no idea.
Honestly I would put the expectation of the average consumer knowing federal tipping law and the expectation for knowing doordash's tipping policies to be about the same. Unless you've been impacted by it, you probably have no idea.
I didn’t understand how tip credit worked until the last time this policy was in the news. I don’t think most people do. Most people don’t realize that the first $5.12 an hour of every server’s tips is just lowering the wage burden on the restaurant, and thus effectively going to the owner.
They 100% of the time take the tip to cover their costs and incentives and leave you only with the excess, per delivery. If I pay a tip through doordash, some amount, if not all of it, will be kept by administration. Which is 100% fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason drivers still picked up deliveries, but that doesn't change the nature of the scam to the consumer.
They 100% of the time take the tip to cover their minimum wage obligation and leave you only with the excess, per hour. If I pay a tip to a server, some amount, if not all of it, will be kept by the owner. Which is 100% (not?) fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason people still wait tables, but that doesn't change the nature of the scam to the consumer.
I really don’t see how this isn’t almost perfectly parallel.
Is what DoorDash doing legal? Are DoorDash employees considered tipped workers under federal law? If the answer is yes, then what DoorDash is doing is legal. And, in fact, I think upon analysis that what DoorDash is doing may be going above and beyond what is required by law by instituting the guaranteed minimum on a per-trip basis rather than an hourly basis.
If you're a tipped employee, then your employer only has to pay $2.13 USD per hour as long as your tips are sufficient to bring your total income to above the minimum wage marker. Most companies use this to pay their servers just the $2.13 based on a 40 or 80 hour week. So if you have a bad night for tips and a good night for tips, your tips would be used to balance out the bad night. What DoorDash does is say if you have a bad night, they pay you the minimum. In fact, they always pay you the DoorDash minimum, and it's when your tips go over a certain threshold that your earnings go up. The DoorDash minimum is much better than the normal $2.13 per hour.
I don't think DoorDash is doing anything different than the restaurant industry has been doing for decades. The only thing they are doing differently is making it VERY apparent abusive the tipping system is towards employees, rather than hiding behind the begrudgingly accepted social practice.
I understand why I initially felt upset at how DoorDash handles things, because it feels like I'm tipping the company. But with a restaurant, I do the exact same thing when I tip their server. It's just not explicitly spelled out. A portion of my tip first goes to offset the restaurants cost of their servers, with any amount over a threshold being a genuine increase in the wages of the server.
The main difference is tip credit is based on hourly, so it's possible for a server to clear the deduction with their first table (at a 15% tip and 3 or 4 people eating). Door Dash takes their cut on every single tip, regardless.
The main difference is tip credit is based on hourly, so it's possible for a server to clear the deduction with their first table (at a 15% tip and 3 or 4 people eating). Door Dash takes their cut on every single tip, regardless.
But proportionally it’s the same. See my post. If one table tips well and everybody else stiffs, the driver actually keeps more of that first tip...whereas the restaurant will continue to grind down any reported tips to meet their credit regardless of how many bad hours or nights you have after.
With DoorDash, if a tip clears the minimum, that balance is “safe.” It’s yours, it’s done. DoorDash can’t dip back into Monday’s tips to satisfy Wednesday’s guarantees.
Restaurants can. And do!
mcdermott on
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EncA Fool with CompassionPronouns: He, Him, HisRegistered Userregular
Honestly I would put the expectation of the average consumer knowing federal tipping law and the expectation for knowing doordash's tipping policies to be about the same. Unless you've been impacted by it, you probably have no idea.
I didn’t understand how tip credit worked until the last time this policy was in the news. I don’t think most people do. Most people don’t realize that the first $5.12 an hour of every server’s tips is just lowering the wage burden on the restaurant, and thus effectively going to the owner.
They 100% of the time take the tip to cover their costs and incentives and leave you only with the excess, per delivery. If I pay a tip through doordash, some amount, if not all of it, will be kept by administration. Which is 100% fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason drivers still picked up deliveries, but that doesn't change the nature of the scam to the consumer.
They 100% of the time take the tip to cover their minimum wage obligation and leave you only with the excess, per hour. If I pay a tip to a server, some amount, if not all of it, will be kept by the owner. Which is 100% (not?) fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason people still wait tables, but that doesn't change the nature of the scam to the consumer.
I really don’t see how this isn’t almost perfectly parallel.
While the end result in dollars may be the same, the methodology and timing is not. The definition of how a tip passes to a recipient is the crux.
But yes, both are garbage. One is just legal garbage.
Is what DoorDash doing legal? Are DoorDash employees considered tipped workers under federal law? If the answer is yes, then what DoorDash is doing is legal. And, in fact, I think upon analysis that what DoorDash is doing may be going above and beyond what is required by law by instituting the guaranteed minimum on a per-trip basis rather than an hourly basis.
Well DoorDash has very little in the way of legal requirements, since we are still dealing with gig economy contractor abuse bullshit. DoorDash never has to care whether your earnings actually added up to a local or even federal minimum wage, after (or even before!) expenses.
As long as DoorDash isn’t actually confiscating tips, they’re presumably fine legally. They have no other real obligations, and that’s the problem. But the real question is whether reducing what the company pays out in an amount up to the full amount of the tip (less $1) is the same as confiscating the tip itself.
The answer, obviously, is no. The customer might “feel” that way, but as long as they aren’t actually withholding more than the guarantee, they can state they paid the tip out to the driver. That they then opted *not* to pay *other* money to the driver because of it has the same mathematical effect, but is quite legal.
Because that’s precisely how the tip credit works. And basically always has. A business electing *not* to pay you money they otherwise would have had to, because you were tipped by the customer. At which point yeah, the customer effectively paid the business some (or all!) of that tip. Same as it ever was.
Honestly I would put the expectation of the average consumer knowing federal tipping law and the expectation for knowing doordash's tipping policies to be about the same. Unless you've been impacted by it, you probably have no idea.
I didn’t understand how tip credit worked until the last time this policy was in the news. I don’t think most people do. Most people don’t realize that the first $5.12 an hour of every server’s tips is just lowering the wage burden on the restaurant, and thus effectively going to the owner.
They 100% of the time take the tip to cover their costs and incentives and leave you only with the excess, per delivery. If I pay a tip through doordash, some amount, if not all of it, will be kept by administration. Which is 100% fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason drivers still picked up deliveries, but that doesn't change the nature of the scam to the consumer.
They 100% of the time take the tip to cover their minimum wage obligation and leave you only with the excess, per hour. If I pay a tip to a server, some amount, if not all of it, will be kept by the owner. Which is 100% (not?) fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason people still wait tables, but that doesn't change the nature of the scam to the consumer.
I really don’t see how this isn’t almost perfectly parallel.
While the end result in dollars may be the same, the methodology and timing is not. The definition of how a tip passes to a recipient is the crux.
But yes, both are garbage. One is just legal garbage.
Nobody has established that what DoorDash was doing was illegal. Just that it was unpopular.
Methodology and timing are largely irrelevant. If I pay you a $7 guarantee up front, the customer adds a $3 tip in the app, I don’t need to ever hand you a three dollar bill. I can say I owed you your legal property of the $3 tip, you owed me $3 back of the guarantee per our terms because you were tipped, and bingo bango we’re square.
You got your $3 and I kept mine. I never withheld your tips. Long as the terms in the contract spelled it out.
Tip credit is incredibly problematic, this is true. I'm not claiming otherwise! But it isn't fraud to the consumer. Doordash's system is, which is why they are removing it once the light of day shone upon it.
In an ideal world, as someone who has served and bartended, my ideal situation would be that all wait staff get paid a livable wage and be able to keep their tips, with back of house getting paid slightly/significantly more (by role) than front-of-house to cover their ineligibility. Cut the crap tricks and just pay people well. If you keep good staff this way, you have less turn-over, better retention of regulars and service, and generally a fuller house to make more profit off of. Lots of chains already operate this way, and their market share seems to reflect that.
but enc
that means my steak will cost $32 instead of $25
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
This is a couple days old, but glancing through the past couple pages it looks to have been missed: the sunlight is making Doordash change their policy.
How uncommon is it for restaurant owners to steal tips from employees?
It is probably not something which is recorded but anecdotally I can't remember ever having witnessed it at any of the venues I worked front or back of house and I had never heard from coworkers of it happening at other places they worked.
I think it's probably more common in places that pool tips but I never worked anywhere that pooled tips.
How uncommon is it for restaurant owners to steal tips from employees?
It presumably happens, shitty emplayers exist, but it’s basically unheard of.
Now, what is more common is misclassification of hours. So an employee who normally waits picks up host shifts, or a runner shift, or some other shift that isn’t normally tipped in that establishment. The restaurant may still code those hours as server hours, taking the tip credit (against tips previously or later earned during server shifts during that pay period), and paying them the $2.13 an hour versus the $7.25 that’s owed.
I didn’t really see this happen at the reputable places I worked either. But I’ve heard stories.
Edit: Also straight wage theft isn’t unheard of in states without the tip credit. An employer can keep their $7.25 or $12 an hour and just not pay the server, and often the tips can be good enough that the server doesn’t make noise (compared to other industries, where wage theft tends to get reported because people need their damn money to live).
This is a couple days old, but glancing through the past couple pages it looks to have been missed: the sunlight is making Doordash change their policy.
This is a couple days old, but glancing through the past couple pages it looks to have been missed: the sunlight is making Doordash change their policy.
That's a weird way to say, "They'll get all of their tips."
Sounds like weasel wording.
Also sounds like lawyers got involved and the owners got told that employers keeping tips is illegal in California and they could go to big boy courts for it.
This is a couple days old, but glancing through the past couple pages it looks to have been missed: the sunlight is making Doordash change their policy.
That's a weird way to say, "They'll get all of their tips."
Sounds like weasel wording.
I read it as he opposite, as an elimination of any potential weasel words. Because it’s very easy to say they were *already* getting all their tips (and DoorDash was simply clawing back their incentive pay).
I agree it could also be because this doesn’t pass the sniff test in Cali. But I think “they keep all their tips” or “100% of tips go to the driver” is more ambiguous than people realize. Have you not read the thread?
The fun part about cali law is because the business is cali based, they would force DD to pay back everyone in every state. California does not fuck around with labor laws.
bowen on
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
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FencingsaxIt is difficult to get a man to understand, when his salary depends upon his not understandingGNU Terry PratchettRegistered Userregular
How uncommon is it for restaurant owners to steal tips from employees?
It is probably not something which is recorded but anecdotally I can't remember ever having witnessed it at any of the venues I worked front or back of house and I had never heard from coworkers of it happening at other places they worked.
I think it's probably more common in places that pool tips but I never worked anywhere that pooled tips.
The thing is, those tips are basically why the waitstaff are waitstaff, so any place that does that will a) lose workers quick and b) gather a reputation.
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MeeqeLord of the pants most fancySomeplace amazingRegistered Userregular
If you get caught stealing tips once, it may doom your business due to lack of solid employees. Restaurant employees are not at all shy sharing stories about bad bosses and word can get around quick. Even talking about messing with tip payouts can caise entire crews to quit. It's not like there isn't another restaurant hiring, its not a glamorous job but most restaurants are always hungry for employees due to high turnover and burn out.
How uncommon is it for restaurant owners to steal tips from employees?
It is probably not something which is recorded but anecdotally I can't remember ever having witnessed it at any of the venues I worked front or back of house and I had never heard from coworkers of it happening at other places they worked.
I think it's probably more common in places that pool tips but I never worked anywhere that pooled tips.
The thing is, those tips are basically why the waitstaff are waitstaff, so any place that does that will a) lose workers quick and b) gather a reputation.
Yes, I know. I was a server in various establishments of different types. Just none that pooled tips. The types of places I imagine it is more common are places which pool tips like walk up counter/take out places where tips are pooled and then split at the end of the night.
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EncA Fool with CompassionPronouns: He, Him, HisRegistered Userregular
So a breakfast chain in my area works on pooled tips. Employees all make about $13 an hour, plus $1-$7 depending on their time with the company and their role. The work philosophy is that everyone is needed to make the meal happen, so everyone gets the same cut of the tip service.
At the same time, pay is collected at front of house at a counter, not at the table, which leaves a specific split in how the tip happens: Cash left on table is not added to the pool, and may be kept by the server as it is assumed to be specifically for them. Cash or card paid at the front of the house is split across the staff.
They have fairly good retention, but that's mostly because they close at 2:00pm and pay their folks well above minimum over time.
Tips are inherently crooked and businesses shouldn’t be fucking subsidized by their customers to pay their own employees. The gig scams are just capitalism making the next logical step on the quest to make impossible amounts of money forever.
Still gotta tip though. A business will not one whit since the only person you’re hurting is the worker.
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thatassemblyguyJanitor of Technical Debt.Registered Userregular
This is a couple days old, but glancing through the past couple pages it looks to have been missed: the sunlight is making Doordash change their policy.
That's a weird way to say, "They'll get all of their tips."
Sounds like weasel wording.
Also sounds like lawyers got involved and the owners got told that employers keeping tips is illegal in California and they could go to big boy courts for it.
I'm hopeful that "could" is actually "will" since it seems like there is already damages on the books. Just because someone stops running a con/fraud doesn't mean it wasn't illegal and actionable in the first place.
Tips are inherently crooked and businesses shouldn’t be fucking subsidized by their customers to pay their own employees.
I totally agree that the tipping system in the US is shitty, or perhaps rather it's an iffy way to address the underlying shittiness of US wages for jobs such as waiting, but do you also think tips are crooked in countries where waiting staff are paid an actual (i.e. not just nominal) living wage?
"Nothing is gonna save us forever but a lot of things can save us today." - Night in the Woods
Ivan Ostos, a 23-year-old Foodora bike courier who was injured on the job in Toronto, is encouraging others to demand better protection for themselves, by being part of a union.
Couriers in Ontario, including Oster, who deliver for the on-demand app Foodora, today announced their intention to join the union representing more than 50,000 Canada Post workers. Hitching a ride with an organized labour movement would be a first in this country for a large group of gig economy delivery workers employed by a multinational company.
In California, Assembly Bill 5 - which would codify the Dynamex "ABC" test for employee status into state law - is making its slow progress through the legislature. Needless to say, gig economy businesses are terrified by this:
AB5 would suck Uber, Lyft, and other gig economy platforms out of their legal vacuum and into well-defined orbits of labor law. It would be doing so in a way that tracks with the reality of their businesses and a common-sense definition of what an “employee” is. This, the companies contend, would be unacceptable, so they’re fighting it like hell.
So, a quick primer on the Dynamex ruling. This was a case that went to the California Supreme Court, where the employees of Dynamex sued over misclassification as contractors. The court ultimately ruled that they had been misclassified; furthermore the court said that the state should be working from a presumption that a worker is an employee, and can only be designated a contractor if a three part test (the "ABC" test) is met:
* First, the contractor must be free from control by the hiring entity in the performance of the contracted work - that is, the hiring entity must maintain distance from how the contractor operates day-to-day.
* Second, the contractor must be doing work outside of the hiring entity's field.
* Third, the contractor is engaged in a trade associated with the work being performed.
Now, because this was a court ruling, it would require gig economy employees to sue to have the ABC test applied. This is where Assembly Bill 5 comes in - it would (with a few exceptions for certain high skill trades like doctors) codify the ABC test as California labor law, applicable to all businesses operating in California.
Understandably, the gig economy is treating this much like a legal meteor aimed at them, as there is no way they would escape having to classify their workers as employees under the ABC test.
So, a quick primer on the Dynamex ruling. This was a case that went to the California Supreme Court, where the employees of Dynamex sued over misclassification as contractors. The court ultimately ruled that they had been misclassified; furthermore the court said that the state should be working from a presumption that a worker is an employee, and can only be designated a contractor if a three part test (the "ABC" test) is met:
* First, the contractor must be free from control by the hiring entity in the performance of the contracted work - that is, the hiring entity must maintain distance from how the contractor operates day-to-day.
* Second, the contractor must be doing work outside of the hiring entity's field.
* Third, the contractor is engaged in a trade associated with the work being performed.
Now, because this was a court ruling, it would require gig economy employees to sue to have the ABC test applied. This is where Assembly Bill 5 comes in - it would (with a few exceptions for certain high skill trades like doctors) codify the ABC test as California labor law, applicable to all businesses operating in California.
Understandably, the gig economy is treating this much like a legal meteor aimed at them, as there is no way they would escape having to classify their workers as employees under the ABC test.
That sounds like 80% of contracted workers are misclassified
Tips are inherently crooked and businesses shouldn’t be fucking subsidized by their customers to pay their own employees.
I totally agree that the tipping system in the US is shitty, or perhaps rather it's an iffy way to address the underlying shittiness of US wages for jobs such as waiting, but do you also think tips are crooked in countries where waiting staff are paid an actual (i.e. not just nominal) living wage?
Yes. As a customer I shouldn't have to guess what I should give you to make up a livable wage, and if you are earning a fair wage why should I just give you some extra money unless you actually went above and beyond? The person who delivers a $15 pizza and the person who delivers $150 of food to feed a party did the same amount of work (ignoring the weight difference at the end), why should the second get 10x the money? Is carrying a beer to the table somehow worth more money than a soft drink?
Tipping people when they literally just did their job is also just conceptually dumb. Congratulations, you managed a 10 minute drive without crashing or getting lost, here's an extra $5. Just increase prices to reflect true costs
So, a quick primer on the Dynamex ruling. This was a case that went to the California Supreme Court, where the employees of Dynamex sued over misclassification as contractors. The court ultimately ruled that they had been misclassified; furthermore the court said that the state should be working from a presumption that a worker is an employee, and can only be designated a contractor if a three part test (the "ABC" test) is met:
* First, the contractor must be free from control by the hiring entity in the performance of the contracted work - that is, the hiring entity must maintain distance from how the contractor operates day-to-day.
* Second, the contractor must be doing work outside of the hiring entity's field.
* Third, the contractor is engaged in a trade associated with the work being performed.
Now, because this was a court ruling, it would require gig economy employees to sue to have the ABC test applied. This is where Assembly Bill 5 comes in - it would (with a few exceptions for certain high skill trades like doctors) codify the ABC test as California labor law, applicable to all businesses operating in California.
Understandably, the gig economy is treating this much like a legal meteor aimed at them, as there is no way they would escape having to classify their workers as employees under the ABC test.
That sounds like 80% of contracted workers are misclassified
Yes, funny that. They are, and it's time to stop letting employers play games.
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Fraud, you say!?
You’re like the third person to claim this, and I don’t see how this is true at all. Doing it per-delivery means that any large outlier tips actually go mostly to the server, while any stiffs still pay minimum. Whereas the standard tip credit let’s a restaurant, in theory, gnaw on a large tip for two weeks if necessary to ensure the restaurant gets to claim their full tip credit.
If I get a $100 tip on DoorDash, followed by nine stiffs, I still kept like $94 of that tip *and* got the $7 or so of the minimum on all the rest as well.
If I make $100 in tips this hour at a restaurant, and make $0 in tips for the next ten hours I work that pay period, the restaurant will continue counting that $100 tip across all those hours, keeping $51.20 of it.
DoorDash’s system actually caps the amount of each tip that can be credited toward the guaranteed minimum. If they wanted to do it like a restaurant, they’d amortize the tips across all guarantees, and only pay out if *all* your combined tips exceeded *all* the guaranteed combined. That would be much, much worse.
DoorDash’s use of a per-delivery credit system seems to favor the driver.
But if you tip $5, then at the end of the month the company fills the gap, all that $5 did was impact the amount that the restaurant has to pay, is the thing. The restaurant employee isn't making any more or less than the minimum based on your tip, if they don't make enough to exceed the minimum. So yes, anytime an employee has to utilize the minimum wage tip credit laws, ALL of their tips are simply subsidizing the amount that the business has to pay out, at that point.
If anything, as with cabs and package delivery, it’s more to do with people not wanting to be honest with what it really costs to deliver hot meals to their door, and pay a fair price for that service. These companies just enable that fantasy.
In an ideal world, as someone who has served and bartended, my ideal situation would be that all wait staff get paid a livable wage and be able to keep their tips, with back of house getting paid slightly/significantly more (by role) than front-of-house to cover their ineligibility. Cut the crap tricks and just pay people well. If you keep good staff this way, you have less turn-over, better retention of regulars and service, and generally a fuller house to make more profit off of. Lots of chains already operate this way, and their market share seems to reflect that.
But they don't (didn't?) keep 100% of the tips, they kept the guaranteed minimum and passed along the excess.
Assume M == $5
If you made 10 deliveries, and
- all 10 tipped $5: you made $50
- all 10 stiffed you: you made $50
- all 10 tipped you $7: you made $70
- 9 stiffed you and one tips you $25: you made $70 (5*9 + 25)
The net result is that you always get at least your tips; the only variance is whether DoorDash got you to work for them for free*.
*($1)
I’d argue it’s equally fraud. If only because so many consumers don’t really understand how it works. When I write a tip in on my Chili’s receipt, I actually have no idea how much of that tip is going to the server, and how much is going to Chili’s in the form of the tip credit. At all. It could be that Chili’s got the whole thing.
So far the only real argument contradicting this is that the tip credit is moot because “oh restaurants would never pay the full minimum anyway, they’d fire any server that tried to get it.” This is worse!
I don’t think many customers at all consider that some or all of the money they tip their server is, legally, going to the owner of the restaurant. So yeah, the fraud is quite similar.
They 100% of the time take the tip to cover their costs and incentives and leave you only with the excess, per delivery. If I pay a tip through doordash, some amount, if not all of it, will be kept by administration. Which is 100% fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason drivers still picked up deliveries, but that doesn't change the nature of the scam to the consumer.
I didn’t understand how tip credit worked until the last time this policy was in the news. I don’t think most people do. Most people don’t realize that the first $5.12 an hour of every server’s tips is just lowering the wage burden on the restaurant, and thus effectively going to the owner.
They 100% of the time take the tip to cover their minimum wage obligation and leave you only with the excess, per hour. If I pay a tip to a server, some amount, if not all of it, will be kept by the owner. Which is 100% (not?) fraud by how tips are defined in the US. Sure, you can make money with the system, there is a reason people still wait tables, but that doesn't change the nature of the scam to the consumer.
I really don’t see how this isn’t almost perfectly parallel.
If you're a tipped employee, then your employer only has to pay $2.13 USD per hour as long as your tips are sufficient to bring your total income to above the minimum wage marker. Most companies use this to pay their servers just the $2.13 based on a 40 or 80 hour week. So if you have a bad night for tips and a good night for tips, your tips would be used to balance out the bad night. What DoorDash does is say if you have a bad night, they pay you the minimum. In fact, they always pay you the DoorDash minimum, and it's when your tips go over a certain threshold that your earnings go up. The DoorDash minimum is much better than the normal $2.13 per hour.
I don't think DoorDash is doing anything different than the restaurant industry has been doing for decades. The only thing they are doing differently is making it VERY apparent abusive the tipping system is towards employees, rather than hiding behind the begrudgingly accepted social practice.
I understand why I initially felt upset at how DoorDash handles things, because it feels like I'm tipping the company. But with a restaurant, I do the exact same thing when I tip their server. It's just not explicitly spelled out. A portion of my tip first goes to offset the restaurants cost of their servers, with any amount over a threshold being a genuine increase in the wages of the server.
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But proportionally it’s the same. See my post. If one table tips well and everybody else stiffs, the driver actually keeps more of that first tip...whereas the restaurant will continue to grind down any reported tips to meet their credit regardless of how many bad hours or nights you have after.
With DoorDash, if a tip clears the minimum, that balance is “safe.” It’s yours, it’s done. DoorDash can’t dip back into Monday’s tips to satisfy Wednesday’s guarantees.
Restaurants can. And do!
While the end result in dollars may be the same, the methodology and timing is not. The definition of how a tip passes to a recipient is the crux.
But yes, both are garbage. One is just legal garbage.
Well DoorDash has very little in the way of legal requirements, since we are still dealing with gig economy contractor abuse bullshit. DoorDash never has to care whether your earnings actually added up to a local or even federal minimum wage, after (or even before!) expenses.
As long as DoorDash isn’t actually confiscating tips, they’re presumably fine legally. They have no other real obligations, and that’s the problem. But the real question is whether reducing what the company pays out in an amount up to the full amount of the tip (less $1) is the same as confiscating the tip itself.
The answer, obviously, is no. The customer might “feel” that way, but as long as they aren’t actually withholding more than the guarantee, they can state they paid the tip out to the driver. That they then opted *not* to pay *other* money to the driver because of it has the same mathematical effect, but is quite legal.
Because that’s precisely how the tip credit works. And basically always has. A business electing *not* to pay you money they otherwise would have had to, because you were tipped by the customer. At which point yeah, the customer effectively paid the business some (or all!) of that tip. Same as it ever was.
Nobody has established that what DoorDash was doing was illegal. Just that it was unpopular.
Methodology and timing are largely irrelevant. If I pay you a $7 guarantee up front, the customer adds a $3 tip in the app, I don’t need to ever hand you a three dollar bill. I can say I owed you your legal property of the $3 tip, you owed me $3 back of the guarantee per our terms because you were tipped, and bingo bango we’re square.
You got your $3 and I kept mine. I never withheld your tips. Long as the terms in the contract spelled it out.
but enc
that means my steak will cost $32 instead of $25
It is probably not something which is recorded but anecdotally I can't remember ever having witnessed it at any of the venues I worked front or back of house and I had never heard from coworkers of it happening at other places they worked.
I think it's probably more common in places that pool tips but I never worked anywhere that pooled tips.
It presumably happens, shitty emplayers exist, but it’s basically unheard of.
Now, what is more common is misclassification of hours. So an employee who normally waits picks up host shifts, or a runner shift, or some other shift that isn’t normally tipped in that establishment. The restaurant may still code those hours as server hours, taking the tip credit (against tips previously or later earned during server shifts during that pay period), and paying them the $2.13 an hour versus the $7.25 that’s owed.
I didn’t really see this happen at the reputable places I worked either. But I’ve heard stories.
Edit: Also straight wage theft isn’t unheard of in states without the tip credit. An employer can keep their $7.25 or $12 an hour and just not pay the server, and often the tips can be good enough that the server doesn’t make noise (compared to other industries, where wage theft tends to get reported because people need their damn money to live).
That's a weird way to say, "They'll get all of their tips."
Sounds like weasel wording.
Also sounds like lawyers got involved and the owners got told that employers keeping tips is illegal in California and they could go to big boy courts for it.
I read it as he opposite, as an elimination of any potential weasel words. Because it’s very easy to say they were *already* getting all their tips (and DoorDash was simply clawing back their incentive pay).
I agree it could also be because this doesn’t pass the sniff test in Cali. But I think “they keep all their tips” or “100% of tips go to the driver” is more ambiguous than people realize. Have you not read the thread?
The thing is, those tips are basically why the waitstaff are waitstaff, so any place that does that will a) lose workers quick and b) gather a reputation.
Yes, I know. I was a server in various establishments of different types. Just none that pooled tips. The types of places I imagine it is more common are places which pool tips like walk up counter/take out places where tips are pooled and then split at the end of the night.
At the same time, pay is collected at front of house at a counter, not at the table, which leaves a specific split in how the tip happens: Cash left on table is not added to the pool, and may be kept by the server as it is assumed to be specifically for them. Cash or card paid at the front of the house is split across the staff.
They have fairly good retention, but that's mostly because they close at 2:00pm and pay their folks well above minimum over time.
Gotta be honest I'm just surprised a D&D thread about tipping made it to five pages.
Still gotta tip though. A business will not one whit since the only person you’re hurting is the worker.
I'm hopeful that "could" is actually "will" since it seems like there is already damages on the books. Just because someone stops running a con/fraud doesn't mean it wasn't illegal and actionable in the first place.
"Nothing is gonna save us forever but a lot of things can save us today." - Night in the Woods
Foodora, of course, is using their app to push an anti-union campaign.
* First, the contractor must be free from control by the hiring entity in the performance of the contracted work - that is, the hiring entity must maintain distance from how the contractor operates day-to-day.
* Second, the contractor must be doing work outside of the hiring entity's field.
* Third, the contractor is engaged in a trade associated with the work being performed.
Now, because this was a court ruling, it would require gig economy employees to sue to have the ABC test applied. This is where Assembly Bill 5 comes in - it would (with a few exceptions for certain high skill trades like doctors) codify the ABC test as California labor law, applicable to all businesses operating in California.
Understandably, the gig economy is treating this much like a legal meteor aimed at them, as there is no way they would escape having to classify their workers as employees under the ABC test.
That sounds like 80% of contracted workers are misclassified
Yes. As a customer I shouldn't have to guess what I should give you to make up a livable wage, and if you are earning a fair wage why should I just give you some extra money unless you actually went above and beyond? The person who delivers a $15 pizza and the person who delivers $150 of food to feed a party did the same amount of work (ignoring the weight difference at the end), why should the second get 10x the money? Is carrying a beer to the table somehow worth more money than a soft drink?
Tipping people when they literally just did their job is also just conceptually dumb. Congratulations, you managed a 10 minute drive without crashing or getting lost, here's an extra $5. Just increase prices to reflect true costs
Yes, funny that. They are, and it's time to stop letting employers play games.