In a restaurant
- The waiter is guaranteed normal minimum wage.
- The owner guarantees they will pay a minimum of <whatever waiter minimum wage is; less than normal minimum wage>
- The waiter gets tips from patrons, which generally brings them over normal minimum wage
- If the waiter's tips do not bring them above minimum wage, then the owner is required to pay them an amount that would bring them up to minimum wage.
With DD, it works more or less the same way, with the difference being that the minimums (upper and lower) are per delivery, not per hour.
If fact, odds are the DD deliverers are going to be worse off now, because DD isn't going to guarantee them a minimum amount; rather, they'll present "we pay you X + you get the tip which is likely around Y". And if the tip isn't enough, the deliverer winds up making less. Unlike before where they got the minimum.
My understanding is that DoorDash was doing the opposite: giving you a guaranteed wage and then subtracting the tips from that. It's as if a restaurant were paying you an hourly wage without tips, and then accepting tips on your behalf.
If a customer had tipped 100% of the guaranteed pay, do you think the deliverer would have seen any of that tip? Or would it all have counted against the guaranteed pay?
- DD provides a guaranteed wage of $1 per delivery, similar to a restaurtant's "under minimum wage" wage.
- DD provides a "you will make at least this much" rate. This is a parallel to normal minimum wage
- If the (<tip> + $1) is not at least <this much>, DD covers the difference
- If the (<tip> + $1) is more than <this much>, DD pays only (<tip> + $1)
The only real differences between that and a restaurant are
- The numbers are all per delivery instead of per hour
- The sub-minimum wage is $1 instead of whatever it is for wait staff ($2.50 or so?). How these numbers compare depends on how many jobs per hour there are.
- The "you will make at least this much" amount varies by the delivery, vs waitstaff where it's a set number for all.
If you consider the "you will make at least this much" number to be "if you don't get tipped enough to make this much, we'll make sure to cover the difference for you", it's more clear how it's the same as for wait staff.
They offered $1 per delivery plus tips, and would increase the wage if the tips didn't meet the expectation.
If you tipped the driver $100, the driver would get $101.
If you tipped the driver $0, the driver would get $4 - $7 because DD would make up for that.
Waiters don't pay the restaurant back if they go over minimum wage. So, no, it's emphatically not the same way it works.
And even if it were, "it's legal to screw people!" is not a reasonable nor humane response to "people are getting screwed!".