The tech industry is building a vast digital underclass
DoorDash is the most popular food delivery service in the country, a fast-growing unicorn valued at $7 billion just six years after its founding, backed by some of Silicon Valley’s and Saudi Arabia’s leading investors. I’ll slinkingly confess that it is also a provider of my lunch two or three or five times a month.
In Silicon Valley, you don’t get very far without accidentally creating a permanent digital underclass, and so it probably shouldn’t surprise you to learn DoorDash has long maintained a compensation policy for its workers that looks pretty much like the outright theft of their tips.
The policy, which has been in effect since 2017 and has frequently inspired small uproars on social media, went viral again after Andy Newman, a New York Times reporter, detailed in a brilliantly dystopian article his nightmarish stint as a New York City food app deliveryman. Only then, finally, did DoorDash kill it.
Newman explained that on his first order, DoorDash offered him a guaranteed minimum of $6.85. His customer tipped $3, but Newman still got only $6.85, not $9.85, because DoorDash uses customers’ tips to pad its guaranteed payout. If the customer had tipped nothing, “DoorDash would have paid me the whole $6.85,” Newman wrote. “Because she tipped $3, DoorDash kicked in only $3.85. She was saving DoorDash $3, not tipping me.”
To anyone with reason, this is tip theft. Yet DoorDash has been gaslighting workers and the media with the argument that its unfair policy was the most equitable and economically optimal model. I got the impression the company was implying its workers preferred this — single moms and college students who valued the flexibility and characterbuilding precariousness of their gig worker status more than such trifling elite concerns as getting the full amount of money customers intended them to have.
After long defending the policy, Tony Xu, the chief executive of DoorDash, threw in the towel Tuesday evening. He promised to put in place a new pay model to ensure that workers get the full amount that customers tip them.
The company’s reversal is welcome. And yet the fact that the tipping policy persisted at DoorDash for so long — and that the company so vehemently defended it in the face of waves of online outrage, and depended for its defense on the fact that most consumers and many workers didn’t quite understand the policy — only lays bare how shaky and capricious the entire digital economy is for workers.
There were other noteworthy facts about this debate. These are times of agitation and hashtagtrending protest, so you might have expected someone in national politics to rush in and slay the injustice of DoorDash’s pay plan. For instance, members of the supposedly socialist-overrun Democratic Party. Didn’t the Democratic House just pass a minimum wage bill that includes reforms to the compensation of tipped workers? Wouldn’t that protect DoorDash’s “dashers”?
Hah, no: The Democrats’ bill says nothing about dashers or any other gig workers, because technically they are independent contractors and not employees — a bookkeeping loophole of enormous consequence that lawmakers are doing little to address.
Not that it would have made much immediate difference to dashers if they were covered by the bill, because the Democrats’ plan only gets to its headline $15-per-hour minimum wage in 2025. I suppose the idea is to give America’s workers something to look forward to in the first year of Ivanka Trump’s presidency.
I’m kidding. The minimum wage is likely to be unchanged by Ivanka’s inauguration, because despite the enormous popularity of raising it, the Democrats’ bill has no chance of passing Mitch McConnell’s Senate, and Fox News is already full of resentment about the notion that coddled minimum-wage workers have anything to complain about.
We are told that we are living in the best economy ever in the history of economies. We are told we have a president who loves and is loved by the working class. And we are warned that there is a rebellious contingent among the left that loves working people and other politically powerless minorities too insistently.
Some pundits are even beginning to worry that Democrats are moving too swiftly toward revolution — that offering free health care, free college and living wages will turn off the vast middle of the country that just wants to return to the pre-Trump status quo of 2015, when everything was wonderful for everyone.
What worries me is that almost no one is pushing for revolution quickly enough to keep up with the enormous upheaval that software will wreak upon labor. What worries me is that DoorDash’s pay injustice was only a small, emblematic horror and that technology is creating a vast digital underclass who will toil permanently without decent protections.
What worries me is that these laborers are “ghost workers” hidden behind screens and apps and algorithms and digital tip jars, working for unpredictable, AI-dictated, subminimum wage, beckoned into furious action when you press this or that button. They are delivering your food, driving you to the airport, sprinting to pick up and wrap your toilet paper so it can be delivered in a day, all while keeping your social feeds free of terrorism and stray nipples.
But what worries me the most is that this is just the beginning. The software-driven policies of exploitation and servility will metastasize across the economic value chain. Taking DoorDash workers tips today will pave the way for taking advantage of everyone else tomorrow.
Because what’s to stop it? The real scandal of DoorDash’s pay scandal is that the company stuck with it for so long despite its clear unfairness. The company was betting it would blow over, because usually such things do.
That instinct was probably correct. The rules of digital society won’t be much different from the rules of analog society: Working people will get shafted.