‘They’re playing dirty’: inside delivery apps’ pushback against tips after New York raises wage
I’m straddling my road bike, carrying two boxes of Chinese dumplings in a paper tote. The DoorDash app tells me I need to sprint my payload across Manhattan – cutting across the Holland Tunnel’s on-ramp – in the next eight minutes.
I’m trying out food delivery under New York City’s new minimum wage law on a frigid December afternoon. Before – I was a part-time delivery worker between 2018 and 2020 – an order like this would have paid just a few dollars, making it a frantic rush to finish and move on to the next one. Now the new rules guarantee delivery workers nearly $30 an hour of “trip time”. So I stop at red lights, yield to pedestrians, and though I end up arriving a couple minutes late, I feel surprisingly relaxed. My customer seems pleased, too.
But the delivery bosses are already trying to reassert their dominance. Since the law took effect, delivery apps have made it harder for customers to tip. Previously, apps like DoorDash would ask customers to tip their couriers when placing orders, allowing workers to see the total amount before agreeing to take the job. Now, Uber and DoorDash have stopped prompting customers before checkout, and those that still choose to tip can only do so after the delivery has been made, through a button that can be difficult to find.
The apps have also limited when workers can sign on, and added new customer fees. The tech companies say New York City regulators are to blame. “We’ve been saying from the beginning, that if this new standard went through, there was going to have to be really unpopular changes made to the platform,” says Eli Scheinholtz, a spokesperson for DoorDash.
Labor advocates say it’s blatant retaliation. “These companies have no intention of making this job a good job,” says Ligia Guallpa, the director of the non-profit Workers Justice Project, which helped pass the minimum wage law. “These companies have become greedier and greedier, and now they’re shifting around their systems to exploit workers.”
For years, tech companies, under pressure from investors, have been decreasing how much they pay the people who deliver those dumplings to your door. When I was a courier, that meant base rates as pitiful as $2 an order – which puts pressure on the roughly 60,000 deliveristas in New York City, the vast majority of them immigrant people of color, to ride faster and harder. But with 33 delivery workers killed on the job in the last three years alone, according to the city’s department of consumer and worker protection (DCWP), delivery work has become one of the deadliest jobs in New York City. A 2017 survey by the Biking Public Project found that 62% of New York City delivery workers reported being in a collision with a motor vehicle at least once, and 30% had missed work from injuries in the previous year.
In 2022, a DCWP analysis of data handed over by the app companies found wages for New York’s delivery workers had dropped to as little as $4.03 an hour without tips, when factoring in expenses, the lack of health benefits and time lost from injuries. The new rules give workers a big pay boost – to what the agency calls a “dignified pay rate” equivalent to an employee’s minimum wage. Under these rules, a delivery company can opt to pay workers a lower rate for every hour they’re on the clock ($17.96), including when they’re waiting around for a delivery. Or, it can opt to pay them a higher rate ($29.93) but only for active delivery hours, and as long as it keeps its workforce “utilization rate” – the total time spent actively delivering as opposed to waiting around – above roughly half.
The labor agency thinks both pay rate options shake out to the same wage boost, but ultimately incentivize companies to increase utilization rates in order to offset the added labor costs. And as soon the rules took effect, the companies wasted no time in restricting workers’ access to their platforms and discouraging tips.
Shortly after Uber and DoorDash removed the tipping prompts, Uber also rolled out a scheduling system called “Planner” that will in effect lock out many workers from signing on to the apps. The apps also introduced new fees for customers: Uber now adds a $2 “New York courier fee” to each order, and Grubhub is adding fees that are reportedly as high as $9 an order.
“No one should be surprised – the city’s own study made clear that the new rule eliminates jobs, discourages tipping and forces couriers to go faster while accepting more deliveries,” said Josh Gold, a spokesperson for Uber.
“Policies have consequences, and these changes come as a direct result of the extreme earnings standard imposed in New York City,” DoorDash’s Scheinholtz said in a statement.
The city says it had no part in the delivery companies’ decisions. “The Adams administration supports consumers’ right to tip whatever amount they wish and urges apps to make tipping options easy for customers to use. We do not endorse Uber’s business practices, nor have we recommended these changes. The apps are required to increase workers’ pay and they should
not make changes that harm workers,” said Michael Lanza, a DCWP spokesperson, in an emailed statement.
Uber removed the tipping prompt to discourage workers from “cherry-picking” for only the highest tip amounts, thus hurting utilization, Gold says. But James Parrott, a labor economist at the New School, argues that low or no tips under the new system would demotivate workers and could hurt utilization just as much. So “it’s unclear” why the gig companies removed tipping pre-delivery, Parrott says, “unless they’re just trying to rile up the workers”.
Andrew Wolf, a labor sociologist at Cornell University, believes that’s precisely the reason. Removing tips “promises pretty transparently to punish the workers for organizing for the passage of these laws”, he says.
Workers are incensed. Gustavo Ajche, an app-based delivery worker and co-founder of Los Deliveristas Unidos, a group that helped pass the minimum wage law, says he’s “disappointed” that “the apps are playing dirty”. Paul, a Brooklyn delivery worker who rides a moped for multiple apps, says he’s dismayed after his tips have dropped to nearly nothing, even during New York City’s recent rainstorms. In the past, tips have helped him earn as much as $60 an hour while delivering through downpours. But it’s no longer worth braving a deluge for minimum wage, he says.
Sergio Avedian, a food delivery worker and gig economy commentator at the Rideshare Guy, says Uber’s justification for axing gratuities is “complete and utter BS”, given that the apps used to constantly pester customers to tip. Now that they’re forced to pay a living wage, the companies have already added new fees, so “it’s not like they’re going to make less money” if a customer decides to add an additional tip, he says. “When push comes to shove, this is definitely retribution.”
But removing tips isn’t the only thing the apps are doing to take back the upper hand. Some longtime workers sense that the companies are dialing up their algorithmic management. Recently, Ajche says he took a two-block detour en route to a restaurant because he needed to make a quick bathroom stop. Almost immediately, his app began lighting up with warnings that he was off track and claiming that his order was waiting to be picked up. “That was a lie,” he says, “when I arrived at the restaurant, the food wasn’t ready.”
It isn’t just an annoyance, it’s dangerous, Ajche says: “They keep pushing workers – more, more, more – but it’s not safe.”
Workers are also anxious about the introduction of Uber’s “Planner” – a work scheduling system that offers priority access to workers who have fulfilled certain ratings and delivery targets, while preventing others from logging on at all. That system is set to take effect on 1 January. (DoorDash and Grubhub already have scheduling systems, and both declined to say whether they were considering further measures to resize its workforce.)
It’s likely that delivery companies will use lockouts to privilege full-time over part-time workers, says Wolf. And even though it could be a positive policy outcome if the companies invest more in workers who depend on the job most, the danger is that the companies can pit the workers against each other and “create fear and division” to undermine support for the new law, he says. Uber staged a similar “lockout” of drivers after New York City enacted a rideshare minimum wage in 2018, which caused some rifts among workers, Wolf says.
Advocates are also worried that companies could start deactivating even more workers en masse – whether to improve its utilization rates or simply to send a message. “Right now you can be deactivated for anything,” says Workers Justice Project’s Guallpa. “We have seen deliveristas who have been working hard until one mistake leaves him jobless and unable to feed his family. The system is not fair, and the way they’re using deactivation is retaliatory.” (DCWP says workers who are deactivated unfairly may file a complaint with the agency.)
In an email, DoorDash’s Scheinholtz wrote that “no one gets deactivated for ‘one mistake’” on its platform, and “we never take the decision to deactivate a user’s account lightly”. DoorDash has instituted an appeals process for deactivations, “driven by human decisionmaking and oversight”, according to a recent blogpost from the company.
But the tech companies still have ample tools at their disposal to keep workers under their algorithmic thumb.
I got a taste of this right after dropping off the dumplings to my Manhattan customer. Though I was ready to pick up another order, my shift abruptly ended and the DoorDash app refused to let me continue. I ended up standing around in the cold for another half an hour, waiting for another chance to sign on, before I gave up and went home.
But I felt a small victory a few days later when I got my final earnings report. “Your pay has been adjusted to meet your earnings minimum,” read the note in the app. My half-hour delivery through Manhattan, including time spent waiting at the pickup and drop-off points, had earned me $17. And then a happy surprise: a $5 tip, which the customer had managed to add afterward, bring the total to $22.
Was that a sign that delivery work, as New York City hopes, has become as “dignified” as any other job? I wasn’t sure. The job, even on its best days, is as dangerous as it is thankless. While many workers should now see a little more consistency in their pay, it doesn’t guarantee them any job security.
Still, my earnings receipt felt like proof that despite the companies’ best efforts to prevent it, delivery work had become a little more humane. As Ajche tells me, as long as customers keep tipping, “We don’t have to be rushing in the streets no more. We can take our time, stay safe.”
This article was updated on 21 December 2023 to include Scheinholtz’s response to claims that workers could be fired after a single mistake.
They keep pushing workers – more, more, more – but it’s not safe
Gustavo Ajche