I've never used Instacart, but I've used GrubHub and DoorDash and the like a couple of times -- I can never remember which one I have an account for, or which one has the restaurant I want, so it's always a hodgepodge.
But one thing is clear as day. When I use DoorDash, the tip box says "100% of tip goes to Dasher".
Look, I know all of these places either charge me a service fee, or if I'm not being charged a service fee, they're marking up the food over list price AND getting a discount from the restaurant for the extra volume generated by the company. FINE.
But when you tell me 100% of my tip goes to the tippee and then you take money out of their pay because I tipped them, that is fraud. Money is a fungible good. It doesn't matter that "my" money went to the Dasher, and you took "your" money from them. In fact, that's not even true, because it's all in one CC transaction anyway. 100% of my tip did NOT go to the Dasher.
I quit tipping on DD as soon as I found this out about a month ago because it'd almost always be less than $4.50, so wouldn't affect the dasher's bottom line anyway. If I start again it'll be cash, but I don't typically carry that in small bills.
But I'm pissed. I've been a heavy DD customer for years and I'm an excellent tipper. Apparently I've been offsetting DD's costs for quite awhile now thinking "100% goes to Dasher." Bad enough that I have to tip in advance of the service--Uber Eats does this right--but they've been stealing those tips the whole time on top of their "service charge" and "delivery fee". I'd love to see them burn.
It doesn't take a class action--last I saw comparative stats they were only doing well in the Bay Area, San Jose specifically, and were rock bottom of the market share elsewhere. We probably just need one educated market to trash this strategy.
I'm in the exact same boat as you. I've been a huge customer of DD's for years and only recently found this out after being confronted by Dashers who thought I'd lowballed them. I tweeted at DoorDash multiple times, and while I usually get some response from them this time it was radio silence. I'm livid.
I did, however, hear from a Dasher who was more than happy to clue me in on the policy[0]. From now on, I no longer tip inside the app and let the Dasher know I'll be tipping them in cash at the door. It's a pain for me, but I feel better knowing 100% of my tip actually went to them like it was supposed to.
Your point is valid, really, and it's something I'm struggling with ethically. The problem is the other services in San Jose are by and large much worse in every other way (unless you really want pizza) and I do rely on deliveries for my current schedule. At what point is the right answer to sacrifice your own needs in order to boycott?
So right now I'm making DD pay as much as possible for each delivery to me, which is the point where I at least retain a bit of self-respect. My hope is this gets "corrected" before I have to quit the service, but if that becomes the only real choice it's what I'll do.
As far as the tipping, I do need to get an envelope of small bills going to meet my own standards there, but at least I haven't hurt the Dashers worse. The moment the 20% tip would be enough to raise their payout (DD guarantees a minimum of $1 from their own pockets, so that's $4.51+) I've tipped it regardless of the offset. They're victims in this.
But regardless of any perceived hypocrisy you may have on my part, DD is a bad actor here. Gig economy has always had the strong potential to exploit the "contractors," but this actualizes that potential in a big way. Even the sub-min-wage base+tips model for service employees isn't this egregious.
He's outraged by this specific issue and found a workaround. You can be upset by a specific company policy yet still find it better than the alternatives
One reaction to discovering that a company you do business with has been exploiting you or its workers is to come up with a strategy for exploiting the company back (within the bounds of the law), ideally without hurting the individual employees.
In other news, 100% of lottery taxes go to the school system. Strange that we don't see the same outrage for the same shady tricks practiced elsewhere.
The argument in favor of this generally goes: if there wasn't a government lottery, there would be privately-run lotteries, and attempts to ban lotteries would just push them into the hands of organized crime. At least a government-run lottery will publish honest odds and pay out to winners, which private/criminal lotteries would less reliably do, and that minimizes the harm done by the lottery.
You can apply basically this argument to similar things which the government doesn't do and people typically don't support (like running casinos or selling drugs), though.
They do sell drugs in Canada now, and it seems to be going quite well, actually. Maybe there's a case to be made after all, although, personally, I prefer the Portuguese model of decriminalizing everything.
I tried DoorDash out for the first time recently. Gave a generous tip because the driver had to wait a while as the food took way longer to prepare. Then I started reading about DoorDash and discovered what you mentioned about tips.
Immediately uninstalled, will never use them again. That is downright criminal what they're doing. Made sure to let all my friends know about that too.
Has anyone tried treating these transactions as actually fraudulent, and asking their credit card company to investigate and reverse the charges? I've heard the card companies will sometimes be pretty aggressive on the cardholders' behalf. That said, this would probably get your account banned from whatever service you try it on.
From my experience they aren't necessarily always on your side, but for a small enough transaction they may not care. They don't investigate aggressively, rather they put the burden on doordash to prove all these small charges.
That being said, technically it's not allowed as you authorized the charges and maybe didn't get 100% of what you were advertised, but I'm not sure you can get a refund for that.
>didn't get 100% of what you were advertised, but I'm not sure you can get a refund for that.
You can definitely get a refund for that. Realistically, DD will just refund the charges and then ban your account. Cheaper than fighting over a $15 tip, especially when disputes cost them whether they win or lose.
Disputes cost them maybe $15-$30 but then they can automate the response so there's no loss. Also, the dispute fees are charged regardless of if they choose to fight it, so they have no reason to unless they simply haven't automated responses.
While you can almost always get a refund for any small charge if you dispute it, it doesn't mean it's technically allowed by the terms, or as part of mandated laws. Laws around this generally only say the credit card company has to investigate your claims, but what they do, if anything, or how hard they "investigate" is not enforced. In practice instead of actually investigating a small $15 charge they'll just refund you.
Given a large enough charge, they will definitely not refund you unless it's like a 100% indisputable billing error case (like you send an invoice you received saying $100 but the statement charge shows something else).
Disputing charges comes with its cost though. I disputed something for the first time last month, and my credit score dropped by 30 points. Seems like disputes are considered a red flag until resolved (I am hoping, will have to see if it goes back up).
At least in the case of DoorDash, they have an arbitration clause in their TOS that effectively quashes any attempts at a class action.
Hopefully one day the US justice system will wake up to the fact that allowing companies to opt-out of the main mechanism preventing them from engaging in this sort of petty-crime-at-scale is not a good idea, but until then it's what we're stuck with.
You can individually opt out of the arbitration clause, the problem is finding a critical mass of other people who opted out within the opt-out period.
The Department of Labor didn't sign no arbitration agreement with DoorDash, and they get a raging hard-on for wage-theft cases. Management stealing tips, where people who didn't do the work but receive a portion (or more) of the tips are slam-dunk cases for them.
DoorDash has a mandatory arbitration clause (that I opted out of but most people don’t) so I fear the best we can hope for is a light tap from a state AG and a flimsy promise to “review our internal procedures” with no big change. It isn’t as though large numbers of people will stop using these services that deliberately abuse their “independent contractor” workers.
> (f) Opt Out. You may opt out of this Arbitration Agreement. If you do so, neither you nor the Company can force the other to arbitrate as a result of this Agreement. To opt out, you must notify the Company in writing no later than 30 days after first becoming subject to this Arbitration Agreement. Your notice must include your name and address, your DoorDash username (if any), the email address you used to set up your DoorDash account (if you have one), and a CLEAR statement that you want to opt out of this Arbitration Agreement. You must send your opt-out notice to: opt-out@doordash.com. If you opt out of this Arbitration Agreement, all other parts of this Agreement will continue to apply to you.
I grew up in Asia, and never quite understood the tipping culture. Because employers aren't paying their staff a living wage, they ask their customers to tip. It all seems completely backwards to me.
These scumbag startups are taking it 1 step further by taking the tips away.
If you can't afford to pay your staff a living wage, your business shouldn't exist.
But isn't this exactly what happens when a charity allows you to specify how your donation gets used, or when a government calls for vote on a new tax that will benefit only X (e.g. education)?
I don't have any proof. But I have always assumed that this is the case. I hope I'm wrong. But I don't see why a charity or a government wouldn't do this.
If the dashers need to be upped to minimum wage, it is probably true that your tip is going towards them, but it affects how much money they get from doordash
Insane. Since the courts seem to agree that "gig" workers are contractors, it seems like we need a new labor movement to secure all the same benefits for contractors that employees get.
Perhaps a nice clear line we could draw would be individuals who are treated as 1099s. This way, companies could still use it and pay their own taxes, while defacto employees would be treated similarly to W-2s.
To play devil's advocate, this is actually standard practice with tipped employees like waiters and waitresses. They are often paid a lower base wage because it is expected they make some of it back on tips. Tips have always been essentially a variable part of the worker's salary controlled by the customer. It's why in America it's considered basically unacceptable to not tip even though it's "optional."
It's not quite that - in places with a lower "tipped minimum wage," the employer only gets to pay the lower hourly rate if the employee doesn't earn the standard minimum wage from tips.
The employee is supposed to report their tips, usually per pay period, and if it adds up to less than minimum wage, the employer is supposed to make up the difference.
Doesn't work out like that in practice, though. My wife waited tables for years when she was young and most of those places just paid enough to show $0.00 on the paycheck after payroll/SS taxes and the like. It also works out to be essentially what Instacart and DD are doing, but with a federal/state mandated "floor" on how low they can pull the hourly from the tips.
Employer still benefits from this though, in both cases. So if the tips DO add up to more than minimum wage the employer is the one who is saving the money from the extra tips.
That's not really part of this problem though, as even if they were compensated for gas and insurance for the car, this still applies.
Fundamentally, people are outraged because essentially tipping is subsidizing the wages the employer should be paying, and that's the case even with a restaurant.
The issue is the tipping system. It's counterintuitive but your "generosity" with a tip, once it becomes standard cultural practice, ends up in one way or another getting nullified by the employer. And there's no real way to prevent this as the OP said, money is fungible, so if the employee gets paid more in some way it all just becomes their total earnings in the end, which saves the employer from having to make up that difference because the market price for the employee's time and labor is fixed.
There is absolutely way to prevent this. We could enact laws to clarify that tips are between the customer and the employee and have no effect on the company's legal obligation to pay minimum wage. That is how the law actually is written in a number of states.
Or enact a law that bans tipping. There are plenty of societies that ban tipping, including places that are more advanced than the US like Japan. Not to mention tipping is another surface area for potential money laundering and tax evasion.
In a restaurant it’s not per transaction so it’s not directly rendering your generosity ineffectual. It’s a matter of degree and convention but not insignificant.
I don’t think it’s fraud. Your money went to the driver, instead of DoorDash’s money. This is exactly how restaurant tipping works in much of the US. As usual, if you want the person you are tipping to keep the money you are giving them in addition to their minimum wage, better tip in cash.
I can't even count the number of people I meet that think waiters (in the state I most recently lived in) get paid less than minimum wage if they don't tip, when that's just not in compliance with the law. You raise a good point, anyway, because this happens all the time in restaurants in addition to DoorDash.
The law doesn't magically make it happen without enforcement. People think that waiters get paid less than minimum wage because they've never met a restaurant where a boss actually follows the law and pays out minimum wage if the tips don't cover it
Source? This seems like a pretty clear-cut lawsuit waiting to happen. I'm aware that not everyone can afford to take on legal action, but I'm skeptical that it's widespread.
"From this article, The Department of Labor’s wage and hour division estimated that nearly 84 percent of full-service restaurants it investigated between 2010 and 2012 had violated labor standards, including but not limited to tip violations."
There isn't really anything like a clear-cut lawsuit when you don't have the money to retain a lawyer, and when the award youd get from winning isnt enough to entice a lawyer to take your case on contingency
But one thing is clear as day. When I use DoorDash, the tip box says "100% of tip goes to Dasher".
Look, I know all of these places either charge me a service fee, or if I'm not being charged a service fee, they're marking up the food over list price AND getting a discount from the restaurant for the extra volume generated by the company. FINE.
But when you tell me 100% of my tip goes to the tippee and then you take money out of their pay because I tipped them, that is fraud. Money is a fungible good. It doesn't matter that "my" money went to the Dasher, and you took "your" money from them. In fact, that's not even true, because it's all in one CC transaction anyway. 100% of my tip did NOT go to the Dasher.