People who used DoorDash or Uber Eats in New York City this week received an unexpected message when trying to order lunch or dinner. According to Business Insider, – You no longer need to tip when placing an order.
Customers may have noticed, among other things, a new fee added to the final invoice. Why did the changes happen? The fact is that delivery companies are not happy new rules minimum wage distributions in New York, which Doordash, Uber Eats and others tried to stop, but could not. They require that drivers be paid a minimum of $17,96 per hour. Before these rules were put in place, delivery drivers earned on average about $7 an hour before tips.
In response, New Yorkers who order food on DoorDash and Uber Eats can only tip the driver after the order is completed.
The changes come amid a broader cultural debate about tipping etiquette, as fewer Americans tip overall while more services require tipping - including self-checkout scanners in grocery stores.
It's all because of the new minimum rate
Delivery apps say they have no choice but to pass on the extra costs associated with the new minimum wage structure to customers.
“These new rules will force us to increase fees for orders in New York,” DoorDash said. “To better balance the impact of these new costs, we are moving the ability to tip in the DoorDash app until after your order is placed.”
According to DoorDash and Uber Eats drivers, they are now paid $29,93 per “active” hour of work to deliver your McDonald's order—solely for the time spent picking and delivering the food. The delivery driver is not paid for the time he spends waiting for new orders. DoorDash said it did the math and settled on $29,93 per active hour to meet the new minimum pay required by the city.
Uber Eats is eliminating upfront gratuities.
“In addition, tips can now only be given after the order has been delivered,” Uber Eats said in a letter to customers. “As always, gratuities are optional and are intended to reward the delivery driver for exceptional service.”
When asked why they are forcing consumers to pay extra costs for couriers, an Uber Eats spokesperson said: “No one should be surprised - the city's own research has clearly shown that companies are likely to cut jobs, not provide tips and force couriers to work completing more deliveries faster.”
However, the New York Department of Consumer and Worker Protection (DCWP) denied this characterization in a statement.
“This is a completely proprietary business solution for Uber and DoorDash,” a company spokesperson said. “DCWP supports customers being able to tip whatever amount they want, we do not condone it or suggest that apps change their tipping policies.”
New “courier fee” in New York
If you live in New York City, you'll have to pay more for your next order, according to DoorDash, which is introducing new service rates. “The new rules will force us to increase fees for orders in New York,” the company said.
Uber Eats sent an email to its New York customers saying it was introducing a new fee “to help offset the cost of paying couriers.” According to Business Insider research, the fee for an order costing around $30 is $2.
DoorDash has made other tipping changes this year that seem to highlight the importance of at least thinking about tipping your delivery driver. DoorDash began sending out “tips” to customers, reminding them that they can increase their tips within 30 days of delivery. In November, the company warned customers that orders without a tip could result in slower food delivery.
Driver advocate Sergio Avedian says DoorDash is sending mixed signals to consumers when it comes to tipping.
“A few weeks ago, DoorDash told consumers in other states that if they didn't tip, their food might not be delivered,” said Avedian, a driver who works for several apps. “Now they don’t recommend tipping to supposedly reduce consumer costs?”
Delivery drivers have consistently complained that their pay has been cut since the pandemic, when orders were plentiful and apps offered lucrative delivery incentives. Customers have also been tipping more during the pandemic, drivers said. Recently, some of them have admitted that they are refusing orders with low tips in favor of higher paying ones.
However, DoorDash has previously argued that drivers are earning more today than ever before. Taking into account tips and base salary, they earn an average of $25 per hour on active deliveries. The pay hike for delivery drivers in New York comes at a time when DoorDash has yet to turn a profit, although delivery orders continue to rise.