Doordash Isn’t Alone – Almost Every Restaurant in America Uses Tips to Pad their Bottom Line

Shutterstock | blurAZ

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This week, many Americans were shocked to learn that Doordash, the most popular food delivery app in the US, steals tips meant for delivery drivers. Few people knew that their tips were going to subsidize the bottom line of this corporation rather than into the pockets of the people that delivered their food. But even fewer know that this arrangement is actually incredibly common, and in fact is likely in place in almost every restaurant and bar they visit.

Doordash didn’t technically “steal” drivers’ tips, it just lowered the amount it paid them by however much they were tipped. So if the app promised each driver a guaranteed minimum payment of $6.85 per delivery, it paid only enough for the driver to receive the minimum including tips. 

If you tipped nothing, the driver got the full delivery fee paid by Doordash. If you tipped $5.00, Doordash paid the driver just $1.85, leaving the driver with still only $6.85. This means that your tips wouldn’t go to the driver as you intended, they just went to subsidize Doordash’s bottom line. It may not technically be wage theft, but it’s clearly an unsavory business practice. Although Doordash changed their tipping policy following the revelation this week, these kinds of practices remain throughout the restaurant business. 

Now compare that to the lived reality of the four million tipped workers in this nation. In the United States, any worker that makes more than $30 in tips per month is classified as a tipped worker, and under federal law it’s completely legal to pay those workers a subminimum wage of $2.13 an hour as long as tips make up the difference between that and the standard minimum wage. 

This subminimum tipped wage operates exactly the same way as Doordash’s delivery fees. Tipped workers are technically required to be paid at least the standard minimum wage, so any amount of tips between the minimum wage and that $2.13 base pay end up saving businesses money, not increasing worker take-home pay. 

This practice is clearly unfair, and it leaves tipped workers to struggle with constant economic insecurity. Servers experience poverty at nearly twice the rate of the overall national workforce, and many experience rampant wage theft. 

More than 1 in 10 tipped workers report wages that fall under the federal minimum wage, and since it falls to the employer to schedule shifts, most workers stay quiet for fear of losing a lucrative shift. Even if an employee wanted to file a complaint with the Department of Labor, the process is long and arduous. For those living paycheck-to-paycheck, going months without pay isn’t a viable option. 

As we fight for worker rights in our new app-based economy, let’s not forget the workers in more traditional jobs who are experiencing equivalent levels of exploitation. Just because something has been going on for a long time doesn’t mean we need to accept it. Every worker, whether they’re a delivery driver or a server in a restaurant, deserves to earn a livable wage. 

That’s why it’s so important that the fight for a $15 minimum wage include eliminating the subminimum tipped wage. People should still be allowed to work for tips, but by making every worker entitled to the minimum wage before you factor in tips, we can ensure that those tips go to the people who actually earned them, rather than subsidizing the bottom line of their employers.

 

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