DoorDash Says It’s Very Sorry You Noticed Its Tip-Skimming Scheme

Illustration for article titled DoorDash Says It’s Very Sorry You Noticed Its Tip-Skimming Scheme
Image: DoorDash

Food delivery app DoorDash has, for months, doubled down on its policy of systematically skimming customer tips meant for its fleet of contract delivery workers. That resolve cracked on Tuesday night when CEO Tony Xu took to Twitter to announce some unspecified changes to its compensation model.


Here’s how it worked. DoorDash offers its delivery drivers a guaranteed payout for each order, upfront—a flat $1 per order plus additional compensation calculated by some kind of malign algorithm. So if a driver is told they’ll make $8 upfront for an order, they’ll always receive at least $8. But if the customer receiving that order gave the driver a $4 tip, DoorDash would treat it as a credit towards the originally guaranteed $8, meaning the driver would still only get $8. The only circumstance in which a customer’s tip would actually go to the driver is if it was very generous.

In other words, DoorDash customers were essentially conned into tipping DoorDash, not the driver. This is vaguely similar to the tipped model for many restaurant employees across the country who have tips applied towards a portion of their minimum wage standard, except abstracted through an app and imposed on a contract workforce with few labor protections. Most restaurants also didn’t have an estimated valuation of $7.1 billion in February 2019.

While DoorDash has previously stood by this policy even under withering criticism, it would appear that the company has finally had it up to here with the proles whining. Sort of, kinda, maybe. On Tuesday night, Xu tweeted that DoorDash “missed” that their policy of tip-shaving would make some customers feel like tipping “did not matter”—which could be generously described as a non-apology—and that after a year of ambiguous “research,” the company will now implement a “new model [that] will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order.”


Notably absent from Xu’s thread is any contrition for its practice of ripping off its underpaid labor force. It is also unclear whether Xu’s statistic that DoorDash’s “average contribution to Dashers stayed the same” since it started pocketing portions of tips in 2017 includes the pocketed tips as part of Doordash’s “contribution.”


(By the way, DoorDash explicitly stated in a blog post in 2017 that internal “tests” of the tip-skimming model “showed that more Dashers earn more money.”)

Xu also did not go into further details on the policy changes, leaving it unclear whether DoorDash’s supposed end to tip-skimming comes with a giant asterisk—for example, adjustments to its guaranteed rates that could easily leave DoorDash contractors making the same amount of money as they do now or less, or some other more subtle form of fuckery.


Gizmodo has reached out to DoorDash for comment, and we’ll update this post if we hear back. By the way, good luck on that San Francisco Office of Labor Investigations investigation.

Tom covers tech, politics, online extremism, and oddities for Gizmodo. His work has appeared on Mic, Yahoo News, AOL, HuffPo, Business Insider, Snoop Dogg's Merry Jane, Wonkette and The Daily Banter.



Generally, this only happens if you try to add the tip into the credit card payment up-front. That’s been a bad idea for tipping for decades. Just don’t do it. Not in restaurants. Not in taxis. Not to delivery drivers. As soon as you do that, chances of the person serving you getting the tip you intended drop to absolute zero. Always, always, always tip in cash.

Side note : for years (at least when I was in the restaurant trade), non-cash tips were “pooled”. At the end of the night, all the non-cash tips for all servers were combined together, then divided equally by the number of servers, and added to our pay cheques. Which of course meant they became taxed. It also meant the laziest workers still got tipped nicely and those who went above and beyond were punished. With cash tips, the money never hit the books and was never accounted for by the restaurants, other than them assuming you would make tips anyway, which meant they payed everyone below minimum wage because of the assumption you’d make it back in “tips”. Restaurant owners and chains are absolute cunts when it comes to properly compensating their servers.