The poster already edited, but to be more explicit: as I understand it’s some variation of some of these companies have been paying the driver X per hour, but if they don’t make X per hour, the tips fill in X-1. Effectively you’re paying the drivers wages instead of the company, rather than tips on top of their wages, in some cases.
Is this a moot point if the assumption tips are reported as wages? I was never a server, but worked in the back of the restaurant so maybe I don't understand, but this seemed to be the same dynamic.
With all that said, tipping seems to be a weird cultural holdover where employers can keep labor rates down via a quasi-voluntary tax
Are you in USA? In UK (pubs/ restaurants that I've had an association with; some time ago) it was normal for tips to be shared with all staff. Maybe that was a UK/rural/independent establishment thing?
I'm old, so this was some time ago. The servers were supposed to share tips with the dishwashers etc. but in practice it was hit or miss since most of the tips were cash and could be easily under-reported. Not sure if it was a law to share tips or not
The difference is this -- let's say your delivery company pays the driver $1 per hour plus "100% of the tips" but guarantees them at least $15 per hour.
The reality is that $1 + tips almost never makes it to $15, so they always pay them $15 an hour.
If you tip $5, they get $1 + $5 (from you) + $9 (from the company).
If you tip $0, they get $1 + $14 (from the company).
This is a shitty system designed to get you to offset company expenses.
In a well-designed system they should not pay them $1 + 100% of the tips, they should pay them $15 + 100% of the tips and where tips are truly optional.
I understand the mechanism. I don't know that I think it makes a large pragmatic difference as long as the pay guarantee is there but it seems a convoluted system as opposed to an immoral or unfair one.
I think where we may disagree is that my main concern is that the employee makes that minimum threshold, whether paid directly by the customer via a weird quasi-voluntary tax or by the employer who would presumably pass that cost on to the customer. Again, assuming it all gets claimed in income I don't see any shortfalls; it's just a weird convention.
Where I may have a problem is that there seems to be some evidence there is bias in tipping. I've seen some that indicates some race groups/protected classes are tipped less, controlling for service quality, even by their own race/class. If true, it would mean tipping is a de-facto form of discrimination and obviously needs to go away.
I would consider unethical when the result of me tipping vs. me not tipping is the same outcome for the driver. If it is advertised as a "tip" box, it should result in exactly that amount of gain to the driver than if $0 were entered in that box. How much you, the corporation, pays, should never depend on what I fill in for the tips.
Also, if the company can pay $15, they should pay $15, and recruiting me to pay part of that $15 under the guise of "tips" is unethical IMO. Call it a delivery fee and charge a fixed amount.
If you are asking me how much extra I want to pay in tips to a driver (10%, 15%, or 20%), I would be sympathetic to gig workers, because you're an asshole for paying them a $1 base wage.
If you are asking me how much extra I want pay to your asshole corporation, the answer will always be 0%. I don't want to pay any extra to your corporation. Name your lowest price that would keep your company afloat and I'll decide if I want the service or not.
This doesn't hold unless you think profits should be driven to zero. Any profit would mean an additional wage being withheld. I may not understand the dynamic here, but my understanding is that tip laws ensure that if the employee comes in under $15, the company makes up the difference.
I've alluded to it a few times, but I think we disagree in that tipping is a quasi-voluntary tax. A tax is a fee paid to subsidize a service. That tax, in this case, subsidizes fare charges by reducing overhead labor costs. If you want to not tip, you should pay a higher fare because otherwise those who do tip are subsidizing your ride. I don't think it's unethical just because it's called a "tip" unless you assume people don't understand how the tipping system works. If your claim is it allows a corporation to make an unfair profit, I'm not sure I'm tracking the logic of that argument because the tax in this case is entirely voluntary. Where I have an ethical problem is when wages are suppressed so much that the public must subsidize employee wages in the form of government benefits. In that case, non-customers are subsidizing the company profits; since they are not consumers of that company, it makes it a compulsory tax to protect their profit. This is entirely different than a voluntary tax on those who use the service.
Personally, I would prefer tipping in general to be banned because it's a clunky, inefficient system. It's much more transparent and straightforward to just have a fair wage without all the game theory that comes along with a convoluted system of tipping.
> Personally, I would prefer tipping in general to be banned because it's a clunky, inefficient system. It's much more transparent and straightforward to just have a fair wage without all the game theory that comes along with a convoluted system of tipping.
Help me understand. Is the distinction here that since they are independent contractors they aren't guaranteed to make a minimum threshold of pay, regardless of tip amount?
That seems to be what they were operating under, but they definitely did not explain this to consumers who assumed that normal tipping practices were being applied. (The checkout looked much like a normal receipt with a tip line.)
It's worth noting that the law is still changing in the area; gig-economy workers in California were classified as employees by the courts, but then this got overturned by a voter initiative, so there are no solid answers as we continue political campaigns and litigation.
