Tips are no longer tips when ordering from DoorDash, GrubHub, UberEats, et al

Let’s call them what they are: payment for service

If we lived in a perfect world, you’d order food, it would be delivered to you, the driver would turn a profit (delivery pay minus the cost of the vehicle, insurance, tires, oil changes, maintenance, etc), and you could tip after if your service was awesome, or not tip if it was terrible.

Sadly, we don’t live in a perfect world and when these apps ask you if you’d like to tip the driver, it’s no longer about tipping for great service, but instead, it’s a payment for services to be rendered, or, one could argue, a “driver bid.”

A “tip” is defined as follows: “Money given to one who provides services and added to the cost of the service provided, generally as a reward for the service provided and as a supplement to the service provider’s income.

I’ll move your attention to the bolded portions of that. When you pay the fees on DD, you are paying for DD’s service, not a delivery. Even the “delivery fees” are a scam fee added by DD because the driver does not get that. I’ve seen delivery fees as high as $12 from certain restaurants, yet the driver still only receives $2.25.

Since the delivery itself hasn’t actually been paid for, and the actual cost of delivery has not been met, the “tip” field isn’t a supplement to the income, but is, in fact, a requirement for the cost of delivering your food.

Let me elaborate further. I’ll use DoorDash (DD) as an example — they pay a base rate of $2.25, almost no matter what, in most markets. I’ve seen orders paying $3 for 17 miles one way (drivers have to drive back to their market too).

After every driver in the market rejects that order, DD may bump it up to $2.50, then to $2.75, so on and so forth. All the while, your food has already been prepared and is sitting there, waiting for a driver to pick it up. As a result of not tipping in advance, you may be waiting a long time for your order to be picked up and delivered, if it ever gets delivered at all.

Sometimes DoorDash has promotional pay (usually +$1), but ~90% of all orders pay the driver a base rate of $2.25 (this can vary by market but this is true for most markets), and if you don’t tip yet live 15 miles from the restaurant, DoorDash will pay the driver — in most cases —$2.25 for that 30-mile round trip, plus whatever your tip was.

That is simply not a profitable rate. DoorDash won’t actually pay more (as we’ve complained for years now) so it falls on the customer who is ordering a delivery service, to actually pay for the delivery service. Currently, the only way to pay for the delivery service is via the “tip” field.

GrubHub & UberEats pay a much fairer rate based on time & mileage, though still not enough to be profitable by themselves ( meaning with no added tip), so the needed “tip” is less on those platforms than on DoorDash to make orders profitable.

There are probably a lot of customers that tip in cash but imagine running a business where every time you serve a customer, you aren’t sure if you’ll make a profit or a total loss and you roll the dice with each and every order.

Gambling is only profitable for the casino. DoorDash, GrubHub, and UberEats are the casino.

Please also keep in mind that drivers are not employees, have no benefits, and pay business taxes as a business. As a result, a driver has two options when confronted with a $2.25 order that had no included tip: they can reject the order and make the customer wait longer for a driver, or they can take it and lose money. There is no real mechanism for negotiation with these delivery apps, so the driver’s ability to negotiate is limited.

Below are some examples of typical orders, even with small tips:

And finally, let’s do away with the calling it a “tip” because it simply isn’t. A tip implies that the service has already been paid for but all the fees you paid actually go to DoorDash, which isn’t a delivery service — we are. Since DoorDash refuses to pay more, you will have to bid higher for a driver to ensure that you get your order in a timely manner and to ensure the driver can turn a profit providing you the service of delivery.

Thank you for taking the time to read all of this and I hope that with this new information, we can all help each other out during these rough times. If you cannot afford to add a “tip” based on your distance, then it’s probably a good idea for you to incur the cost of driving to the restaurant yourself instead of asking a local driver to do it!

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