DoorDash and Amazon Won't Change Tipping Policy After Instacart Controversy

An anonymous reader quotes a report from Forbes: The tipping controversy that prompted Instacart to reverse a compensation plan to its contract workers isn't likely to go away: Rivals DoorDash and Amazon Flex are continuing to adjust driver pay based on how much they get tipped, saying doing so ensures a minimum payout. The practice, which has its roots in the way brick-and-mortar restaurants pay waitstaff, has been adapted to suit the needs of app-based delivery companies. The difference is that gig-economy workers are independent contractors, and so aren't protected by the minimum wage laws. Instacart, a $7.6 billion grocery delivery company, made a change in October 2018 that workers would receive at least $10 per delivery order. Customers and shoppers didn't realize that the tips were counting towards that minimum instead of being a bonus on top. So if someone tipped more, Instacart effectively had to pay less. That's how one Instacart delivery driver ended up with Instacart only paying 80 cents and the rest of the minimum being met with tips.

The company reversed its decision on Wednesday after public outcry, admitting that counting tips in its payout totals was 'misguided' and has moved to a new pay scale that doesn't factor in tips at all. But DoorDash and Amazon Flex, the contract workforce that delivers packages for Prime Now, continued to stand their ground. DoorDash claims it has been transparent about the tips being part of its delivery driver pay since it made the change in 2017, including on a blog post on whether customers should tip, and maintains that delivery-driver retention and overall satisfaction both 'increased significantly' since the change. Both DoorDash and Instacart insist that they never turned the payment dial down if someone received a large tip. Instead, both companies used an algorithm to calculate a base pay rate that would include things like time and effort it took to deliver. If that base pay plus tip fell short of the price they guaranteed, then both companies would pay out more to make sure its delivery drivers reached the payout they had been promised. But in cases where the tip plus its initial calculation reached the promised payout, then the companies would only contribute the amount that the algorithm had calculated the delivery person deserved. One simple solution if you want to make sure your tip gets into the hand of your digital delivery worker: tip in cash.

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