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Comment by mannykannot | Hacker News Reader

And while it is not as important an issue, I, as a tipper, feel that I have been defrauded when this happens (now that I am aware that this does happen, I assume that it has probably been done with some tips I have made.) To be clear: this is not an alternative way of looking at the issue, it is an additional indictment stemming from the practice.

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> I, as a tipper, feel that I have been defrauded when this happens

It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.

I'm more upset about this line from Instacart:

> We include tips in the calculation [of pay for deliveries] so that you can get a more accurate picture of what your earnings will be after completing a batch.

This is incredibly dishonest. They're arguing with a straight face that they're doing you a favor by smoothing your earnings from an unpredictable (for example) $8-$50 per hour down to a more reliable $8-$9 per hour.

This is actually the same argument the US government advances in favor of its sugar tariff. Sure, it raises the price of sugar by 200% on average, but it protects us from the awful unpredictability of the world sugar price.

Tip pooling/sharing is different in a few significant ways, though.

First, restaurant staff always know ahead of time if they have to share tips.

And their hourly compensation, as ridiculously low as it may be, is never adjusted to compensate for higher than normal tips.

And, finally, in most restaurants the tip pool is also split up with bussers, bartenders, and hosts who don't always make tips of their own, but still contribute to the overall experience.

I agree that the first two points are significant, but I don't think they're particularly relevant to the viewpoint "as a tipper, I feel I'm being defrauded when this happens".

The third point is also correct, but in that case I think it supports the idea that the tipper is being defrauded when it happens.

I feel like you maybe need to write a book about why you think a server sharing their tips around is equivalent to a corporation reducing wages based on tips.

I don't see how any shorter treatment would be a sufficient explanation.

I mean, imagine the scenario where the server just buys a line cook a drink to say thank you. Fraud!

> I mean, imagine the scenario where the server just buys a line cook a drink to say thank you. Fraud!

That would be a case of the server getting the money and deciding to buy something for the cook.

Whereas in an actual tip-sharing restaurant, the server gets his share of the tip pool after the cook's share has already been taken out. He doesn't get a choice in the matter.

This is generally not what the people giving the tips have in mind.

>This is generally not what the people giving the tips have in mind.

Can you substantiate that in any way with any kind of evidence or is it a baseless claim?

I'm just one data point, but I imagine I'm not alone:

If I tip someone well, it's because they've been incredibly attentive, kind, accommodating, etc. As much as possible, I want the tip to brighten their day. The effect is greatly diminished if that money is immediately divvied up amongst the other servers, making the difference to what they bring home negligible.

I've never worked as a server (though I did work at Chik-fil-A in highschool; employees are not allowed to accept tips there), and I did not realize that many restaurants are involved in the handling of tip money, rather than the tips going directly to the respective server.

So, no, that's not what I had in mind.

Why should anyone expect that sort of handling of tips? Not everyone has worked a job involving tips. I didn't. Should I have spontaneously asked one of my server friends "hey, btw, how are tips handled at your job? Like, I suspect that when I tip someone, you know, that money goes to them, because after all, I gave it to that person and not the restaurant and not anyone else, but just in case I'm mistaken, could you tell me what happens with the tip money after I leave it on the table? It's a question that's been gnawing at the back of my mind, and I just had to ask!"

My point being: unless you're a server at one of those restaurants, how would you know that your server doesn't get the tip you left for them? Could you substantiate such a claim?

You are not alone, just in a minority of people who are not familiar with something that is almost integral to US culture: that most people in the hospitality/services/restaurant industry depend more on tips than wages, and that the bigger the business (chain restaurants vs small local places) the more likely that their system involves pooling the tip money.

The point being made that you're repeatedly ignoring is that that in this scenario the staff gets the tips. Only the staff. In no point in time, whether it's individual tips or tips sharing, does the restaurant receive any part of the tips pool.

From the tipper's perspective, what would the difference be between the restaurant garnishing the waiter's tips vs the restaurant garnishing the waiter's tips and then giving some to the cook?

> And their hourly compensation, as ridiculously low as it may be, is never adjusted to compensate for higher than normal tips.

This varies by state. Google "server wage" and your blood will boil. It's illegal in WA, though — servers make standard minimum wage and employers can't take servers' tips.

Yes, minimum wage for servers is lower than for people who don't get tips. But it's still illegal to lower a person's wage below what was advertised because the person got a tip.

I think you're confused.

You're describing "server wage" laws, in which employers are free to steal tips up to the difference between real minimum wage and server wage per hour. In effect, servers in these states make above minimum wage during peak times and at most minimum wage off-peak. But they have to work off-peak or they don't get scheduled for peak hours.

In WA, this form of wage theft is illegal. Your statement, "minimum wage for servers is lower than for untipped workers" is false in Washington state, which is where the wage theft in TFA took place.

I don't see how my previous comment was confused. It was drawing a distinction between "server wage" and what Instacart is doing.

I never claimed "server wage" laws apply to this situation.

Also, the term "wage theft" seems like it doesn't apply to "server wage", because "server wage" is a construct specifically created by the law, whereas wage theft is something that's illegal.

It’s somewhat bullshit that the people who did all the work making the tasty meal get nothing, while the person handing it to you gets 20 percent. Especially when Seattle minimum wage is $15/hour and tips cannot count as part of that.

Tip sharing as a concept is well extended.

Having seen the wrong people get rewarded bonuses, RSUs and raises all the time. You are just better off with a salary band/pay grade and give money uniformly across the band.

Ideally 'top performers' are supposed to be rewarded for 'top performance'. But in any subjective evaluation you are just dealing with cooked up documentation to prove a person did something, therefore deserves extra. Pretty much any and anyone's story can be twisted and narrated in a way that could sound positive or negative, to reward or punish respectively.

You are better off with a tip pool and paying it across the band.

I've also wondered about it (though I know that bring a server is still by no means an easy task). I think Freakonomics had an episode on topping and reported (advertised?) some restaurants that split the tip between servers and cooks, or just don't let the customer tip but pay their employees more, upfront.

Yes, tips are bullshit

Tips are a holdover from the days of slavery. That's why it's so terrible.

https://www.fordfoundation.org/ideas/equals-change-blog/post...

Farming is a holdover from the days of slavery too. Almost everything is.

If the restaurant pays you less due to the expectation of significant tipping, then I do have a bit hard time too see why the practice of Instacart and restaurants differ that much. I guess you need to be American to understand this tipping logic.

Instacart is dynamically adjusting down wages in response to tips; restaurants have a fixed wage, with a legislated minimum — even if it accounts for average tips.

The difference is that one allows the customer to dynamically adjust the wages in response to service; while in the other the company is pocketing that variance themselves, rather than passing it on to workers.

It’s simply fraud to pretend one situation is the other — there’s a distinct and meaningful difference in who pockets tip variance.

At my first waiting job, we didn't report our full tips because if our income including tips surpassed $8, our salary would be reduced. With the "benefit" that if we made less than minimum wage, we would be compensated. However base pay was $2.50/hour + tips, so do the math.

Yet somehow the system only ever seems to work in one direction. I once had to pay $20 after working an 8-hour shift before leaving home under threat of termination (right-to-work state) because of the two tables I had that night, one was a giant party that didn't tip me at all and the other ran out on his $20 meal while I was taking care of other duties in the back. Somehow my responsibility, of course.

  Somehow my responsibility

Right-to-work state or not, I know if no state in which that $20 clawback (as you describe it) was legal.

I have no doubt it was considerably illegal, however I would have been terminated immediately in a town where finding another job without a vehicle or parents would have been impossible, and since I was living on my own as a minor at this time it was pretty important that I maintained income.

After several more undoubtedly illegal maneuvers by a new manager to fire me and other waitstaff so that he could replace them with random girls he wanted to work for him so he could hit on them, being taken off payroll without clearing it with the senior manager, and afterwards being reduced to a single day a week on the slowest days, I quit.

I then had to leave the place I was living at two months later to a brand new city, contracted mononucleosis, and, not having any saved up money after quitting this job and unable to work due to being bedridden for 4-5 months, basically starved myself into extreme malnutrition other than the food I could steal and scavenge, surfing from couch to couch. So, essentially my worst fears about quitting my job over illegal practices were realized.

I could also tell you stories from other jobs about bosses pulling firearms on me, commanding me to do straight up illegal things like lie to the police, illegally withholding paychecks for entire staff for months at a time, illegal unpaid overtime, slashing wages between paychecks, working me into extreme injury from RSI and then subverting my ability to collect comp, firing me over "clerical errors" for trying to cancel a shift I didn't even mean to sign up for on a stupid new workforce app after my boss explicitly lying about my employment not being in jeopardy, etc, and all of the hardships I had to endure for leaving each of these jobs at my breaking point.

You all are being duped into contrived outrage. The example given in the OP link is very misleading and it is quite obviously cherry picking (to spark emotion) and is actually an outright lie. The truth is that Insticart actually pays a $10 minimum per delivery (this isn't even mentioned in the OP link) So how did this person make 80 cents an hour? The delivery was 0.7 miles and took 69 minutes. Ironically, under Insticart's previous policy, this delivery person would have made essentially the same amount. People making deliveries in dense urban areas (especially during traffic hours) can actually make far more than they used to.

I am not sure why delivering 6 bags of groceries took over an hour in this case. It is entirely possible however that they made several other deliveries in between Wegmans and this location (making a $10 minimum for each). It is possible that this person actually made $50+ during this 69 minutes.

Source for more details of new policy: https://www.miamiherald.com/site-services/new-newsletters/bu...

So is not a typical scenario. I could put together an article just as misleading showing that Insticart pays a mint...

I don't like when people try to mislead me. Perhaps the fact that the tip is not going directly to the delivery person is offending some of your sensibilities. This is quite legal. Many states have done this for the past 80 years. I don't know how residents of states that practice this are surprised. All restaurants and other service industry locations you frequent do the same.

Being a food delivery person, a restaurant server or for that matter a McDonald's employee is not a skilled labor position and has never been a job someone should aspire to feed a family off of. We have people busting their butts, putting themselves through college, working their way up the ladder. We have 50k skilled labor jobs vacant in this country that pay a good wage and even offer training. People used to move across the country for these jobs. They used to leave their grandma's basement and go make something of themselves. Now we just have them making a bunch of noise over McDonald's not paying a Living Wage. Grow up. This world should not reward the lazy, it results in ever increasing mediocrity.

https://www.npr.org/sections/ed/2018/04/25/605092520/high-pa...

https://www.forbes.com/sites/kathycaprino/2018/08/30/dirties...

https://www.cnbc.com/2018/07/05/the-us-labor-shortage-is-rea...

https://www.google.com/search?q=the+us+has+vacant+skilled+la...

What the hell does that have to do with my comment and my own experiences?

I worked these jobs while trying to support and educate myself so that I could get a better-paying job.

At the same time, if 6-8 hours a day of Instacart deliveries isn't enough to provide you with an apartment, tuition money and food & entertainment for a wife and two children, then it's a service that shouldn't exist and it is only propped up by investor cash.

Because that is what minimum wage was originally meant to provide for an individual in America, before nearly a century of propaganda and misdirection convinced people like you that someone on minimum wage is lazy and doesn't deserve enough money to eat healthily, rent a decent apartment and have enough cash for some entertainment, and generally live better than someone in a third-world country, much less afford something like an annual vacation or car payments.

>"I worked these jobs while trying to support and educate myself so that I could get a better-paying job."

So did many of us. People are not supposed to have to support a family as a primary earner on minimum wage and they never were. According to the 2013 Bureau of Labor Statistics, full time minimum wage earners earn over the poverty line by more than $3,000 per year. Two minimum wage earners can support a family of four and live above the poverty line. Avoiding poverty is all about choices.

>"At the same time, if 6-8 hours a day of Instacart deliveries isn't enough to provide you with an apartment, tuition money and food & entertainment for a wife and two children, then it's a service that shouldn't exist and it is only propped up by investor cash."

>"Because that is what minimum wage was originally meant to provide for an individual in America, before nearly a century of propaganda and misdirection convinced people like you that someone on minimum wage is lazy and doesn't deserve enough money to eat healthily, rent a decent apartment and have enough cash for some entertainment, and generally live better than someone in a third-world country, much less afford something like an annual vacation or car payments."

You have your facts quite wrong about the minimum wage and what it was originally meant to provide. The minimum wage was first enacted in 1938 by FDR. It paid a meager 25 cents per hour (this is $4 today when adjusted for inflation). So it has become substantially more generous as time has gone on. This is the opposite of your claim.

People in third-world countries earn less than a dollar a day. I'm sure they would love to earn even the 25 cents per hour that the original minimum wage paid.

Everyone I know that has been stuck in minimum wage jobs have definitely been lazy or made very poor choices (like stealing from their employer ETC.) in fact, only 3% of people above age 25 in the US make only the minimum wage.

Get the actual facts before making biased and factually incorrect claims (and cite sources when doing so). It really hurts your credibility to just make things up and try to sound like an expert so maybe no one will call you on it and you will appear to make a valid point.

Source: https://bebusinessed.com/history/history-of-minimum-wage/

This is really common in restaurants. Legal or not, it happens ALL the time. I've not only seen in in restaurants I've experienced it as a waiter as well.

>It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.

In that case at least the staff get your tip. In this case Instacart is taking it for themselves.

There are issues with tip pooling, but there's one thing that I am absolutely sure of: my tip was not intended for the person's employer, and certainly not for anyone who claims to have arranged for the work to be done by a nominally self-employed contractor.

There's the crux. People may or may not think that their tip is going into a pool, but people definitely do not think that their tip is them saying to the establishment itself "I wish you'd charged me more!"

> It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.

Absolutely. Thought its definitely more pernicious to find out the restaurant owner was keeping the tips.

Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money at least is seen by the service staff.

Statistically speaking, the main party missing out on its cut when you tip in cash is the IRS. Not really an ethical concern for most of us, but for those who do feel bad about this, you could just overpay your taxes every year by say 10% of what you estimate you tipped in cash.

It is the obligation of the tipped employee to report their tips as income and pay taxes on them. True, it's difficult to audit so sometimes they don't, but that's hardly my problem.

The notion that you should overpay your own taxes to solve this is just bewildering.

The worker is supposed to report all cash tips. Since most of these workers probably pay little to no taxes, it really doesn’t harm the treasury, even if they fail to report.

Recipients of cash tips must report the income to the IRS for taxation purposes. The fact that many people choose to refuse to disclose their cash tip earnings doesn't mean that I should bulk up my taxes to make up for their fraud.

Companies must now report credit card transactions to the IRS. It's possible for them to see % of cash vs credit and the amount topped in credit. It would not be hard for them to audit you, the worker, if you report lower cash tips than the average than your boss reports in his business.

I’m pretty comfortable tipping via credit card because I understand that the card company and a bank is taking a cut. I am _not_ comfortable with something like this, where it’s not immediately clear what’s happening.

Anecdotally, I've been told by a lot of former restaurant workers that management generally walks off with most or all of the credit card tips. I generally tip in cash everywhere as a result.

I worked for years as a server and this never happened to me. We just got taxed on them and everyone didn't report their cash tips.

and it also reinforces the point that the whole tipping culture is ridiculous

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