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It was very unethical. Calling something a tip implies a lot in the US and in most other industries the tip legally can't be taken by the employer and compensation has to at least total to the minimum wage.



Wasn't what they were doing exactly the same mechanics as how typical tipped employee salary work, just at a different threshold?

Eg, in Mass, it looks like tipped employee minimum wage is 4.35, and tipped wage plus tip must be $12/hour. If the employee doesn't get any tip, the employer has to foot the difference.

So for all practical purpose, all the tips you give up to $12/hour are simply saving the employer money but don't change anything for the employee unless they do dodgy shit like not declaring cash tips.

Yeah, the whole system is bullshit which is why we should abolish tips altogether in favor of proper minimum wages (or higher for professions that usually get a lot from tips like bartenders)


Restaurants have to make up the difference for the whole pay period, not per-order, which means any individual tip goes 100% to the waiter. And restaurants expect that they don't have to make up the difference because waiter pay after tips is expected to exceed minimum wage. So the rule where the restaurant has to make up the difference is just the loophole that lets them get away with paying less than minimum wage in the first place.

Whereas DoorDash's model was set such that you had to tip over $10 for the dasher to see a single cent of it. This meant that nearly all tips went to DoorDash instead of to the dasher, because I have to imagine most orders don't have a >$10 tip on them. And this was calculated per-order instead of per pay period, which mean that, as a customer, your individual tip was going to the company instead of to the dasher.


> Restaurants have to make up the difference for the whole pay period, not per-order, which means any individual tip goes 100% to the waiter.

That is definitely not a useful place to use "which means".


In other words, customers noticed that a fair tip is more than they want to pay, so they got mad at DoorDash instead of paying their servant.


And you are here, blaming the customers instead of DoorDash for taking money intended for the dashers?? Might as well go pick up the thing myself, or hell, just make my own food at that point, then neither you or the company will receive even a cent. It is disingenuous to characterize the customers here as masters and the dashers as servants. You provide a service of your own will and customers pay for it.


Tipping over $10 on a $20 order is not anybody's idea of a "fair tip".


Doordash iirc took the tips out of /every/ transaction not just the initial 5-10 dollars per hour (the difference between minimum wage and tipped minimum wage) like restaurants do so they were profiting from every tip. Restaurants only really get the benefit of the first couple tips given each hour and depending on the restaurant cost, the ratio of servers to tables and the turnover rate the first 2-4 tips of every hour likely cover the difference the restaurant is making with anything else going to the customer (I'd love to have some actual numbers here from servers but the math makes sense). So in general unless it's a slow time your tip probably actually goes to the serving staff instead of just benefiting the restaurant.


Exactly. I didn't really understand the outcry, unless people in the USA just don't understand fully how tipping works. It's exactly the same model that restaurants use.


> unless people in the USA just don't understand fully how tipping works.

Every "outrage" in the US consists mostly of shit people don't understand. That doesn't mean they're wrong about the cause, but you can be "right" for the "wrong reason".

In this case, yes, DoorDash employees are getting screwed. At the -same time-, DoorDash is doing nothing weird or outside of the norm.

The solution is wrong. People are trying to get 1-2 companies to make tipping a little less bullshit, when its tipping itself, across the entire country, that is broken.


One important distinction to me is DoorDash took benefit from every single tip while restaurants only benefit on the first couple tips until the difference between minimum wage and the tipped minimum wage is negated. After that all tip benefits go directly to the person being tipped where people expect it to go. Generally, depending on a lot of variables, after the first handful (I’m ball parking 2-4) of tips that gap should be covered and most times servers should see way more than that in tips.


I think it's more likely that you don't know how tipping works in restaurants. While the restaurant can take tipping in account when setting their hourly wage, they cannot garnish, in real time, larger or smaller portions of each individual tip a waiter earns on each ticket.


That's just a difference in model, and "gig economy" vs traditional. I'm not saying they work identically - they can't. But it obviously didn't start out that way with restaurants, and I doubt it will with DoorDash for long. Once they have an idea of average tips in markets, expect them to set a flat per delivery rate that is much lower, and let tips be tips.


Yes, it's the same. Ultimately the worker has two paymasters who also pay each other and money is fungible. The faux moralism is just the two parties -- corporate, and customer, jockeying for how to split the money the worker earns. And the poor worker doesn't even get a voice.


I tend to agree, yet I also believe if I'm not mistaken this is kind of how servers at restaurants work too. They have some minimal base wage, then tips. If their tips do not take them to minimum wage, the employer must pay the difference to get them to minimum wage. In essence, we as customers are subsidizing the restaurant owners to get their employees to at least minimum wage pay. So the question is why are we just now getting outraged when this has been being done to people for a while in certain places, and is still happening to servers but it's somehow not complained about that I'm aware of.

edit: looks like it depends on which state you're in in USA on this. Mostly West Coast seems to have 'sane' ones: https://www.dol.gov/whd/state/tipped.htm


Generally though once a server has gotten a couple tables (2-4 maybe but it depends a lot on the local tipping culture and the restaurant) done all of the rest of the money tipped is all extra and unless it’s a really slow day most tips are going to the server. DoorDash applied their adjustment to every single order so unless a driver was tipped more than a certain amount (I’ve heard $10) they never received the tip.

Also there’s a decent amount of talk about how bad tipping is and talks about getting rid of it but it’s a culturally ingrained thing so it’s not going to go easily, especially as it benefits restaurant owners so they’re unlikely to change unless there’s a lot of social and business pressure to do so.


All of what you say seems basically true, I still don't understand why the tipping subsidizing what restaurateur should pay as wages isn't even seen as much of an issue but DD drivers should be a special case, is all, other than "we're more used to it at restaurants so it's fine"


Most tips actually go straight to the employee after the first few dollars tipped every hour where DoorDash took 100% of tips below $10 on every order.

For example: In my state of NC for example minimum wage is $7.25/h and tipped minimum wage is $2.13/h so any money tipped after the first $5.12/h is all going to the employee. $5 worth of tips isn't that much to get per hour even averaging across a whole shift that includes both a mealtime rush and some off hours.


It's not a matter of agreement, it's a violation of federal labor law for people not involved in the service from taking any portion of a tip. Tony Xu was taking parts of tips to reduce the company's wage commitments.


And my point was in various US states this is apparently legal to do if you trade Tony Xu for some restaurant owner and DD drivers for servers. So why has it been Ok for restaurants to do this? Does a different law apply to DD situation?


It's been OK for restaurants because the tipped wage was a fixed number.


You say Tony was taking tips, Tony says he was grossing up workers who don't earn enough tips. The whole outrage is people want to pay less than the job is worth and then blame Tony for it from his side.


No, the model was to pay $X unless there's a tip, in which case Tony takes it and pays $X-$tip (unless the tip is over 100%?). Management is taking tips, which is hella illegal and has been (to varying degrees) for quite some time, certainly since before DD existed. tl;dr: wage+tips, not wage-tips.


It's unethical, but only to the customer, not the deliveryperson. Except to whatever extent market wages are unethical.


Yes, but that's unethical enough to condemn, isn't it? I mean, I was personally horrified that the "tip" that DoorDash had been soliciting with that attractively placed button was in fact really a tip to the parent company and not the dasher. I feel defrauded, and would really like that tip money back.

Whether tips or regular wages are better or not is an endless argument, and it doesn't seem like dashers are particularly exploited relative to other gig economy jobs.

But still... that fake "tip" button was designed to exploit my emotional desire to fairly compensate low wage workers to goose DoorDash's revenue numbers, and that sucks.


They don't work for DoorDash however, they're contractors who are agreeing to terms with DoorDash.


Most people don't really get the contractor/employee split that all these companies take advantage of and even then the word TIP has certain implications. If I tip someone well I expect the worker to get more not for the company employing or contracting them to pay less, I want the money to go to the person not the company.

Even in the US where tips go against wages it's not so bad, generally the first tip or two will cover the difference and workers are probably doing way better than that. Doordash on the other hand applied the same thing to /every/ order.


It's going to be a sad day if the argument in court is that the customer is "tipping DoorDash" (and not the actual delivery contractor).


I don't think that justifies wage theft.


Didn't say it did, but it's a very relevant point in all of these discussions as normal wage law can get tricky when you're involved with contracted services.

DoorDash can claim they aren't paying for the time, but for the service. And how long that service takes is the responsibility of the contractor.

Is it dirty? Very. Does that make it untrue? No.

So the first step in any of these cases is to get these gig economy apps to admit that they're just trying to circumvent wage law by classifying employees as contracted services.




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