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NYC delivery workers say apps are making it harder to tip. A new bill could change that.


By

Karen Yi

Published Apr 9, 2024


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Demonstrators hold "Los Deliverista Unidos" signs, which show a red cartoon delivery worker.

 

Photo by Emil Cohen/NYC Council Media Unit


By

Karen Yi

Published Apr 9, 2024


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Food delivery apps would be required to allow customers to tip when they're ordering instead of after they get their food under new legislation from a New York City lawmaker.

City Councilmember Shaun Abreu told Gothamist he plans to introduce two relevant measures during the City Council's scheduled meeting on Thursday. The first would return the tipping option to checkout on delivery apps and the second would require the minimum gratuity suggestion to be set at 10% of an order's cost.

“This is the most common sense bill for not only Deliveristas but consumers, and it comes at no cost to employers,” Abreu, who represents parts of Upper Manhattan, said in an interview. “We noticed almost immediately that these apps engaged in a clear attempt to retaliate against minimum pay.”

The city's app-based food delivery workers say giant app companies have made it harder for customers to tip them, despite a historic win boosting their minimum pay, and that this has led to workers losing hundreds of dollars in earnings.

Delivery workers began organizing collectively as Los Deliveristas Unidos during the pandemic, fighting for better working conditions and pay. They won new protections and minimum wage standards in 2021, but the pay law wasn’t implemented until last year, after four tech companies failed in court to stop the wage hikes from taking effect.

The minimum pay rate increased again last week to $19.56 an hour and is set to increase once more next April. The city estimated that, before the increase, app-based delivery workers earned an average of $5.39 an hour before tips.

Tech companies hire delivery workers as independent contractors, meaning they don’t get health insurance or other benefits employees typically receive. App-based delivery workers also cover the costs of their own transportation, maintenance and other supplies required for their jobs. But unlike independent contractors, the delivery workers don’t set their own pay rates, putting them in a gray area of employment law.

Ligia Guallpa, executive director of the nonprofit Worker’s Justice Project, said delivery workers noticed almost immediately after the first pay increase rolled out that DoorDash and UberEats had removed the option to tip until a consumer receives their order. Meanwhile, GrubHub lowered the range of tipping suggestions in its app, according to the workers.

Guallpa said the changes have sent a message to customers that “tipping is not necessary." But he said workers still rely on the extra cash if they don’t get enough orders or accrue enough active working hours, which triggers the minimum pay rates.

The city’s rules allow apps to determine how they pay delivery workers. Workers can get a higher wage rate for every active hour they receive an order and while they're making a delivery. They receive a lower rate if they’re paid for the entire time they spend on an app, including while they’re on call waiting for orders. On average, workers’ earnings should equal the minimum hourly rate.

Guallpa said companies changing their tipping structure “was intended to hurt workers’ wallets and also mislead the public while continuing to grow their market and continuing to profit from the labor of workers.”

DoorDash previously said it was necessary to move tipping to after food is delivered, because the company had to increase customer fees to account for rising costs. Uber and GrubHub also previously said changes to their tipping practices were needed to meet new costs. The companies didn’t comment on the proposed City Council bills.

Delivery worker Alejandro Grajales said he used to earn about $500 in tips a week but now earns $100. Before the tipping changes, about 15 of his 20 daily orders would result in a tip; now just five do.

“We need the tips to sustain ourselves,” said Grajales, who's worked as a Deliverista for nine years. “Everything falls on our pockets: a punctured tire, clothes for rain, clothes for winter, alarms, GPS, insurance, vehicle maintenance, if we get sick or into an accident that has to come out of our pocket."

The city’s Department of Consumer and Worker Protection said it was aware that apps were making it harder for customers to add tips to orders.

“We absolutely do not endorse these business decisions and we look forward to reviewing the legislation to reverse these changes that have reduced consumer choice and wrongly punished workers,” said Stephany Vasquez Sanchez, a spokesperson for the agency.

Antonio Solis, another delivery worker, said the new pay floor has made the work less stressful and dangerous for workers, because they're no longer incentivized to break traffic laws or speed to earn enough money.

“Now our time is valuable and we’re earning for the time it takes us to make a delivery,” he said. Previously, delivery workers would travel miles just to earn $3 or become anxious if a restaurant was taking too long to prepare an order, he added.

But Solis said he worries the protections are eroding as app companies make tipping harder and find other ways to limit how much workers earn.

Abreu, the councilmember, said he’s working on another bill he plans to introduce next month that would require more pay transparency from the companies. The bill would mandate that apps disclose to workers their active and on-call hours and how their pay was calculated.

“This is low-hanging fruit that would make a huge difference in the lives of so many,” Abreu said.

Tagged

Politics

technology

new york city

economy

City Council

transportation


Karen Yi

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Karen Yi covers homelessness and poverty. She joined the WNYC and Gothamist newsroom in 2020. Before that, Karen covered Newark for the Star-Ledger and spent almost a decade working for newspapers in New Jersey and Florida. She grew up in Miami and has a dog named Cashew. Got a tip? Email [email protected] or Signal 917-589-1460.

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Gothamist is funded by sponsors and member donations


Gothamist is funded by sponsors and member donations


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