DoorDash and UberEats Adjust Tipping Policy
DoorDash and UberEats, two popular food delivery services, have announced changes to their tipping policies in light of the New York City government’s decision to raise minimum wages for app workers. Starting immediately, both platforms will no longer prompt customers to tip until the food has been delivered. This move aims to eliminate tips as an optional incentive for faster delivery.
Challenges & Lawsuits
The decision to change the tipping policy comes after DoorDash, Uber Technologies, and Relay Delivery, all filed lawsuits against New York City earlier this year. The companies sought a temporary restraining order to prevent the implementation of the new pay rate requirement, which was set to take effect on July 12. GrubHub also joined DoorDash’s complaint.
New Minimum Wage Law
While most app-based delivery workers are considered independent contractors and not subject to minimum wage laws, New York City has become the first to challenge this norm. Officials argue that the higher minimum wage will benefit thousands of residents by lifting them out of poverty. The city now mandates a minimum hourly wage of $17.96 for delivery workers, with plans to increase it to nearly $20 per hour by April 2025.
Financial Impact on Delivery Apps
With the increased financial burden, delivery apps claim they will need to offset the costs by raising prices and fees for users. DoorDash stated, “These new regulations will force us to raise fees for orders in New York City. In order to better balance the impact of these new costs, we’re moving the option to tip in the DoorDash app to after checkout.” UberEats also informed its delivery workers that the changes would result in higher earnings per hour.
Continued Support for Tipping
Despite the policy changes, both DoorDash and UberEats assured their drivers that tips would still be fully passed on to them. These platforms recognize the importance of tips as a source of income for their gig workers and stressed that the adjustment in tipping prompts does not affect the drivers’ overall earnings.
Conclusion
The shift in tipping policy by DoorDash and UberEats reflects the ongoing challenges faced by food delivery services following New York City’s minimum wage increase. As companies navigate the impact of these changes, customers can expect adjustments in fees and tipping processes.