Again I am puzzled how this does not count as fraud - a felony with a jail term measured in years.
And no, re-defining 'tip' to mean whatever Amazon wants it to mean somewhere in the Terms of Service fine print does not absolve them.
And no, re-defining 'tip' to mean whatever Amazon wants it to mean somewhere in the Terms of Service fine print does not absolve them.
I’m not saying that’s just. Companies abuse service workers, and use some legalistic convention to do so.
Would you go suing basically every restaurant for fraud though? Justice here really means legislating the wages and tips laws to be more generous to workers.
Certainly this isn’t the expectation of consumers of these delivery apps that it might work that way. It even says in pretty much all of them “100% of the tip goes to the driver,” further setting up the expectation that this is in addition to base pay... not subsidizing it.
Either we need cultural and policy acceptance of the Instacart/Amazon model of subsidizing pay, or they need to change their behavior (which feels far more fair given the employer size). It’s not like the majority of delivery apps are mom & pop — they’re billion-dollar corporations or multi-million dollar startups backed by big VC money. Cutting costs on the backs of your dynamic and more economically vulnerable labor force feels cheap and immoral.
I guess apparently Amazon, DoorDash, and Instacart do!
> 100% of the tip goes to the driver.
That's verbatim what happened! They just omitted the additional fact that they would decrease the base pay, like in the food industry.
> Cutting costs on the backs of your dynamic and more economically vulnerable labor force feels cheap and immoral.
Sure is! But restaurants do that too!
The difference is, a rich, single, 35+ year old male programmer can be righteous about Instacart. I mean, they don't cook for themselves, they don't tip their Amazon drivers (they didn't know you can do that!), they eat out, so who cares if the tips are taken away.
But virtue taking away your right to pay $50 for a dinner-for-one at Burma Love? Fuck that, they say. They're hungry.
I call BS. Money is fungible, so "of the $10 we gave the driver, $5 was from you and $5 was from us" doesn't mean anything outside of the stories we tell. All that happened in terms of bank transactions was that you gave Amazon $5, and Amazon gave the driver $10.
That said, there is a good way to tell whether they're getting your tip or not. Ask how much more money the specific driver you tipped received than if you hadn't tipped. That's right, $0.
(On the other hand, I bet if you tipped more than the base pay, the driver would get that much. So big enough tips probably make a difference.)
Though what really matters is what the courts say :-).
Yes, they do get a base pay that gets eaten away by tips until the tips exceed the base pay. It's structured like so:
1. The state minimum wage is, say, $8.
2. The state minimum wage for tipped workers is much lower, say $2.
3. But the minimum wage for tipped workers doesn't exempt you, the employer, from paying the overall minimum wage. If someone is so terrible at their job that they only make $1 / hour in tips, then you have to pay them $7 / hour so they end up making minimum wage.
But you can describe the exact same pay schedule differently:
1. The minimum wage is $8 / hour, and that's what waiters make.
2. But for tipped workers, up to $6 / hour of tips can be garnished by the employer.
As you can see, your first $6 / hour of tips do nothing but reduce your base pay. Whatever you get tipped above that amount is yours to keep.
You had it right the first time, but the first $6/hour of tips do not reduce your base pay, and are not considered garnishments since you are guaranteed a minimum no matter what. (And "garnish" does have a legal meaning in this context so that's definitely the wrong word to use here.)
It should be contextualized another way: the first $6/hour of tips offset the make-good wages the restaurant would have to pay if you hadn't earned those tips.
Except for the joy of financial engineering, there is no difference between "you make $8 / hour, and the first $6 / hour of your tips go to me instead of you" and "you make $8 / hour, and whatever tips you get are yours to keep, but the first $6 / hour of your tips lower your base wage by an equal amount".
But you must conceive of it as either garnishing tips or eating into the base pay, because if you work one hour and get tipped $20, you only earn $22. If your tips weren't being garnished and also didn't reduce your base pay, you'd earn $28.
Tipped workers have a lower minimum wage. The standard minimum wage is relevant only if they don't reach that with tips. It's a fallback that was added to the law to protect the rare servers who don't make at least minimum wage from their tipped income. It's the exception, not the norm.
Do they really though? The employer must guarantee that they earn the standard minimum wage, regardless of what happens with tips, so effectively their minimum wage is the same as everyone else's and all this stuff about "base pay" is a wordplay shell game.
Either way, what's effectively happening is the customer is subsidizing somebody who their employer would otherwise have to pay, so it all amounts to the same thing: your tips up to a certain level are going to the employer, not the employee.
Going to repeat this again, for emphasis: tipped workers have always had lower base wages than non-tipped workers. The make-good requirement is a late addition to labor law that very rarely applies. The make-good requirement applies so rarely that a server who doesn't make at least standard minimum wage after tips will likely be let go for basic incompetence.
- Make up a scenario.
- See who gets how much money.
- Ask yourself what I would predict.
- Then, and only then, tell me I'm misunderstanding something. And then tell me what it is.
Very few wait staff are in the range where the tips affect how much their employer pays, and they're definitely not supposed to be in that range. The base pay is not $8, because almost nobody has to be brought up to that. The base pay is $2, and none of that gets removed.
That's not the case with most of these delivery companies. They have smaller numbers of tips and they're not a tip-based income. The base pay really is the bigger number, and the companies are subtracting from it.
Or in short: You have the math right but your definition of "base pay" is wonky.
In other states/countries, this practice is highly illegal.
Those restaurants are not advertising minimum wage + tips, or even just minimum wage. They're advertising $4 + tips. Amazon should similarly advertise whatever it's guaranteed to pay itself + tips. Then it's transparent and there's no confusion.
So while this practice is scummy, it's basically just speeding up what would happen normally.