A report from New York City’s Department of Consumer and Worker Protection (DCWP) seems to show that DoorDash and Uber delivery workers were deprived of more than $550 million in tips after changes were made to the interfaces on their apps. Mayor Zohran Mamdani’s administration said the companies moved tipping prompts to less prominent locations in their apps after new pay standards for delivery workers took effect in December 2023. The DCWP says the apps raised customer service fees to subsidize the new pay rate and moved the in-app tipping function to after checkout so upfront delivery costs would seem lower.
A spokesperson for DoorDash called the DCWP report “flat out wrong,” adding that their delivery workers always receive 100% of tips placed through the app. “Moving tipping to after checkout isn’t novel or nefarious – it’s how tipping works in many areas of life,” a company representative stated. “It should be up to consumers, not politicians, whether [customers] want to tip more in New York after already paying for a billion-dollar raise for workers.”
Average tips on both platforms fell to $0.93 per delivery from $3.66 within a week of the adjustments, the report, which was released in January, said. Over the course of 18 months, the shift resulted in a $554 million loss in tip income – or roughly $5,800 per worker annually.
Mamdani campaigned on better working conditions and treatment of delivery workers. His push builds on a string of labor changes enacted by former mayor Eric Adams meant to support delivery workers – including amendments to the city’s delivery worker laws, requiring apps to provide more prominent tipping options, like a 10% tip suggestion and allowing customers to tip during checkout.
DoorDash and Uber jointly sued the city to block the requirements, arguing they violate their free speech rights under the First Amendment. The laws force them to “advocate for and implicitly endorse the city’s preferred message.”
Source: Crain’s New York Business
