It’s the same with the tipping that seems almost everywhere these days. Instead of the workers being paid properly by the company the customer gets guilt tripped to tip and when you don’t tip the worker is angry at the customer, not the company.
For some services like Uber Eats/DoorDash I've heard that orders will just sit on a shelf because the tip isn't high enough to entice someone to "claim" that order. Tipping is mandatory if you want to get your food in any reasonable timeframe.
Tipping has spread further and further into our economy and into areas it never should have existed (I'd argue it shouldn't exist at all but it's moved well past "traditional" and reasonable places). Services have the audacity to charge you a membership fee and then essentially require tips on top of that (Looking at you Kroger Boost, I've got a blog article worth of issues with that service).
Honestly this is great, for two reasons:
1. You're letting the market figure out the right price for delivery service at any given moment, which reduces deadweight loss. For instance, if you're price sensitive you can order during off-peak times to get a discount. On the other hand, if it's peak hours and you need food urgently (impatient kids?), you can be assured that your order arrives ASAP rather than 1 hour later.
2. It strengthens the case for DSPs treating their delivery workers as contractors, because the price isn't set by the DSP.
edit:
To be clear, I'm for having prices for delivery services be set by the market (ie. people who want food delivered can put in bids and delivery drivers can put in asks). I'm not for the current state of affairs where your order is "accepted" but you have to put in some indeterminate amount of tips to get it actually serviced.
Also as a consumer I have absolutely zero information on how busy drivers are, if my tip needs to be > $X to get picked up faster, if more drivers will login if I tip $X or greater, nor do I have a way to increase my tip if drivers aren’t “biting”.
IF I had that information/ability I’d concede to part of your point but I don’t and even if I did I hate that idea with a fiery passion. If that’s the world we are going to live in then why am I paying a membership fee AND service fees?
I’d say you don’t get to eat your cake and have it too but that’s absolutely what these companies are doing.
Why do you expect that the app won't have such information displayed? The UX isn't hard. It seems pretty trivial to show a bid/ask chart of delivery prices, along with stats like how many drivers are online and how many orders are coming in. You could even use those pieces of information to come up with an estimate for how much you have to bid to get a driver within n minutes.
edit:
I re-read my original comment and realized that it was worded in such a way that implied that I supported the state of affairs that the gp described. To be clear, I'm only advocating for letting the price be determined dynamically.
>If that’s the world we are going to live in then why am I paying a membership fee AND service fees?
I don't see how this is relevant to my proposal. It's already the case today that you can get charged a membership fee (eg. uber one) and get charged delivery/service fees.
I've used them. They don't. You seem to be conflating a description of how things are today with how things could be run instead.
As an idea… it might be neat to try at least. But I think you’d have to build the whole service around delivery bidding, there must be abuses in this sort of market, right? As a customer, make 10 accounts and “take” every bid higher than yours, that sort of thing.
I realized that after reading some of the replies. I made various edits accordingly.
>As an idea… it might be neat to try at least. But I think you’d have to build the whole service around delivery bidding, there must be abuses in this sort of market, right? As a customer, make 10 accounts and “take” every bid higher than yours, that sort of thing.
This is probably a non-issue. My impression is that it takes a non-trivial amount of work to get a driver account on such platforms. At the very least you need to give some sort of driver license scan and/or background/SSN check. That alone makes it fairly hard to set up fake accounts to take out competing bids, just so you can save $5 or whatever on your delivery.
And what I'm saying is that there's already uncertainty. The current interface of DSPs showing that it'll arrive within 30 minutes or whatever, is a leaky abstraction of how the underlying system (ie. restaurants and delivery drivers) work. Just as how DSPs likely have some sort of system to estimate delivery times based on current supply and demand, they can build a system that also factors in price, and give consumers various price options and their associated estimates.
No, you aren’t, because there is no clear signal to the buyer about acceptable price (except, the outright fraudulent, if one accepts that the tip is actually part of the delivery charge, membership + delivery free charged by the intermediary).
> It strengthens the case for DSPs treating their delivery workers as contractors, because the price isn't set by the DSP.
Unless you are a shareholder of the DSP, this isn’t a benefit.
See my edits.
>Unless you are a shareholder of the DSP, this isn’t a benefit.
The existence of gig jobs is a benefit for people who can't work regular hours, and therefore can't get jobs as "employees" (delivery or otherwise).
Employees with irregular hours are a thing, and were even moreso before the trend of forcing them into more precarious designated-as-contractor-roles (often contrary to labor law) became popular with the “gig economy”.
Note that I never made any claims about whether it's actually better for every employee, or even the average employee. I was only responding to your claim that "Unless you are a shareholder of the DSP, this isn’t a benefit". Moreover, I'm skeptical your claim that people are being "forced" from being employees to being contractors. At least when it comes to restaurants, the DSPs were basically servicing restaurants that didn't do deliveries before. Therefore it's highly unlikely that anyone who was previously a delivery employee was forced to switch to being contractors, because those jobs didn't even exist before.
On the other hand, I was recently doing searches for "food near me" and the UberEats / DoorDash delivery fees were under $1.
I'm not really pleased that useful search results about what is where have been replaced by useless ads for UberEats, but there's no argument to be made that you're getting charged twice when you're asked to tip. As far as the pricing goes, delivery appears to be priced at "pay what you want".
I'm reporting the itemized delivery fee advertised by the services. I did no investigation at all, because I wasn't looking for delivery.
In my experience, anything less than a 50% off coupon for DD or UE is not worth it. Their markup and delivery fees really add up.
They have a low fixed "delivery fee" that they advertise heavily and then add a 15% "service fee" for the customer and also charge the restaurant a percentage.
[1] https://www.nlrb.gov/cases-decisions/decisions/administrativ...
https://www.engadget.com/2019-02-06-instacart-revises-pay-po...
As far as I know Instacart has stopped doing this, and many other apps were busted for this, but it's utterly, utterly shameful.
Unionized may end up deciding that tips work in their favor, so that's not necessarily a solution. What we really need is for the government to ban soliciting of tips or to ensure prices are fully transparent prior to sale. That's a more realistic solution anyway, and one with fewer potential societal costs to it.
https://www.nlrb.gov/news-outreach/news-story/statement-on-n...
There have been restaurants have tried non-tipping models, consumers and staff both hate it. First the highly productive staff often make less under that model (where poor performers make more), consumers hate it because the menu prices increase, and you end up with McD's level customer service where drinks are never refilled, and service overall degrades.
Although based on some recent news articles I found when I tried searching for a more definitive source, tip amounts have gone down in the past year or so.
hmmmm
>>but it might be that service in general is poorer now.
I wonder why that might be? You have allowed emotion to screw the system. the entire purpose off a tip is pay for the service. no serivce no tip. People work of incentives, if they know they will get 20% no matter what why would or should they give you good service?
you set the expectation, and now complain that people have given you exactly what you expected of them
One sensible metric is that you should be able to support yourself while living in the area you work (or an area nearby such that it isn't a significant financial hardship or timesink to commute to work). Service jobs largely fail on that metric, effectively using government money and family support structures to cover the gap.
I don't know how you got to that, other than by assuming that nice areas have to be expensive. The fact that SF is unable to achieve both is an indicator of broken local markets and politics, not an ironclad rule for every other locality.
Edit: Another framing is that "nice" and "fancy" are different things, as much as extremely unequal markets like SF distort the distinction.
This is generally the case. I can’t think of a single counter example.
Most of the US satisfies these constraints, especially if you own and don't mind driving a car.
San Francisco can be a playground for the rich until they get sick of paying for $30 lattes or whatever and flee to low cost locales like Manhattan that have affordable housing and transit.
It won’t be “fixed” until we’re all backed into an economic corner where it becomes politically acceptable for the property owners to lose bazillions of dollars.
This is problem with basing wages on an individual needs, in reality the wage you are paid should have, and does have nothing to do with the amount of money you "need" to support yourself.
it is just a arbitrary wage picked by legislatures exactly like a "minimum wage" law only the "living wage" seems to apply to older people, where "minimum wage" laws apply to everyone. For example a 20yo in the UK can make "minimum wage" but a 24yo will need to make "living wage" both of which are just numbers pulled out of thin air, not connected to "the amount of money you need to support yourself. "
The living wage is not in the UK. Dispute the method all you want of course, but there is a method:
Yes, it gets complicated, but “$7.25/hr isn’t enough” is not complicated.
Not everything needs a government mandate. Every drive thru, and service job I see is has $13, $15, $16 per hour wages, and this is in the midwest where the median income is hovering around 50-55K
That's factually untrue and kind of an absurd statement. Of course people live in Manhattan working as servers.
The idea that a job shouldn't exist if it is only something that would interest a high-school student or uneducated young adult who is willing to live with lots of roommates creates fewer opportunities at the low end--not more.
I think as well something that would be concerning regarding the quality of service of the places that you're talking about that the quality of service depends upon how much money is being given, and less things that oftentimes help people perform on the job better (non-toxic environment, healthy egoless leadership, good colleagues, good company ethos and ethics, etc).
Obviously pay is important, it's a job after all, but people can't magic the willpower to perform well for money out of nowhere. I think that's up to the company to protect and foster that kind of a productive workplace where people can achieve their potential.
You mean like most restaurants in europe? Yes the service there is on average worse than in American restaurants because of tips, but in my opinion not by enough of a margin to cost me 20% every time. The times that you would tip at a eu restaurant, its something reasonable well below the ridiculous 20% average that American businesses have swindled into existence (because a tip is supposed to be extra, not the employee's actual means to paying rent)
The US has a less hard sell model and free refills. That changes alot of the dynamics
Also if you are drinking alcohol (and only Alcohol) with EVERY meal, well you may have a problem
They better just raise the menu price, any place that has a 20% service charge added automatically (outside the standard large party ) will never get my patronage again
>> once you add sales tax
that is nothing like Sales Tax. Sales tax is a fee the government is charging ME that the business is mandated by the government to collect on my behalf, I owe the tax not the business. People often do not understand that context. Just like when your employer taxes out of your paycheck, you owe the income tax but the employer is mandated to collect it because the government do not trust you with your own money.
Similar to the argument against unions.
I have one such restaurant near me and I neither hate it nor experience bad service. It's been like this a few years and they're doing fine.
I’ve travelled all over the world and I don’t find the service in America to be that much better honestly.
I have no problems looking them in the eye and pressing 0% -- No Tip.
Citation needed. My experiences at no-tipping restaurants have been the absolute opposite of your claims: great food, great service, and no fucking around with tipping afterwards.
If I'm at a restaurant, I really don't want to have much interaction with most of the staff; I'm there to talk to my dining party and to eat and drink. _Really_ good wait staff know this and are attentive (e.g. to your drinks, or can notice when you need them), personable when they're there, but otherwise you don't notice them. I think tipping culture discourages this, as being invisible isn't an obvious way to get a tip.
I just wanted to share the fact that there are places where tips are shared by the whole staff, and that system works well (I can't say if it works worse or better than the one you're describing as I don't have much experience with it). It also has the advantage that non-public-facing staff (e.g., cooks) get their share of tips too.
I'm sure that's why I don't see tip jars at grocery store checkouts, because the workers there are so well paid. Moreover, if you work at a job that society thinks is socially acceptable to ask for tips, why would you leave money on the table just because you're paid $25/hr?
I do not care if people think I am not paid well, if they want to tip me, I am more than happy to accept it.
When I worked as a server, tips were far preferable to salary.
We’d get $10/hr plus tips, which could work out to $30/hr on average.
We had people who came from other server jobs paying $20/hr with no tips who felt they were getting screwed.
in which city? I would never describe making $62k a year in NYC as being paid well.
There is a reason why so many people work jobs that pay tips when apparently HN thinks a flat hourly rate is better.
In NYC I've heard it's not unusual to get $80-100k at a higher-end place under a tips model.
Which one.
Tipping is a stupid concept. Japan has the number three economy in the world and they'll refuse tips.
Watch https://youtube.com/watch?v=V4sbYy0WdGQ&si=EnSIkaIECMiOmarE and tell me that he's wrong.
I am going to need a better definition of overpaid and underpaid, and the Reservoir Dogs quip about women only being able to be economically independent due to tips is also going to need a source.
How do you find it a reasonable argument to compare upper-end office workers to service industry employees? Are you saying lawyers and engineers are paying their mortgages with tips?
> If a business is pushing for tips (those dumbass Toast POS consoles that now often start tipping at 20%), the workers are underpaid.
If the argument is “if workers are paying for their mortgage with tips, then they are underpaid”, then I would respond that analyzing each individual’s cost structure to determine how much you should pay them is, at the least, very inefficient.
This is done (in part) to incentive the business to ensure their workers are reporting their tipped income, it is not uncommon for people to try to evade taxation by not reporting tipped income
Exploring a bit into how it might fail: AFAIK Japanese people shun tips because it is seen as an unwelcome incentive to do better, and they take pride in doing their best wherever. Tipping, thus, is akin to saying "This should motivate you to do better next time" - basically an insult. This is said in the site you linked to as well, it quotes a testimonial from an employee that didn't quit an oppressive job she had because a customer complimented her work. Not because of a silent tip and a nod.
An app that intends to 'remove friction in tipping' and 'motivate employees with tips', goes against Japanese cultural values very hard. The workers are (allegedly) not motivated by tips and tipping doesn't have a friction problem unless you're the owner/manager trying to get in on it. Additionally, this is something the workers have no input on, it is a terminal on a table whose sole purpose is to add tips to the service. No employer would ever allow its workers to do this just because, let alone pay a company for this service. There has to be a split of some sorts embedded into the game, which leads me to think this will motivate only prospective employers looking to get a cut on the tip income.
According to the site, the terminal only asks if you want to tip and the customer says yes or no, with a tick note appearing in the terminal if the customer says yes. This could help cover tip stealing. How would you ever know your tips were stolen if you didn't even know you were tipped in the first place?
So not only are they importing the tip system from the United States, but also the adversarial relationship between hosts and owner/managers that encourages tip stealing, and a form of tip stealing that the workers can't stop because it's in an app controlled by the owner/manager, not a jar tallied at the end of the day by the same workers that filled it.
Maybe I'm reading too deep into it, I tend to do that sometimes.
What's your definition of "underpaid"? What does anyone deserve to get paid?
It's really really difficult to create some sort of moral framework around the jobs people do and the rewards they get for doing them (does a plumber deserve to get paid more than a dental hygienist?). Capitalism is efficient because it doesn't try to. It just rewards people for supplying the things others want.
"Underpaid"/"overpaid" would have to be relative to what markets pay. But if all servers receive tips, that's just what the market is doing.
More simply, you wouldn't argue that janitors are correctly paid, just because they don't receive tips. They just don't have the surface to collect them.
It allows places to keep base prices as cheap as possible, which means lots of people can afford to eat out, but people who can afford to pay more can do so. It’s sort of like raising the minimum wage but but having the costs only impact people with higher incomes.
Yes, plenty of rich people are stingy and terrible tippers, so it’s not a perfect analogy. But I try to tip a lot everywhere I go and that’s how I think about it.
Corporations are in competition with other corporations, which is why there is not dynamic pricing. They are not offering anything worth more than they are offering. Your perspective fails on those merits when the solution is to pay employees correctly and see which corporations were never economical after all.
Absolutely. Prices should be raised to cover reasonable salaries (making up the gap covered by tips nowadays), and then if you were really happy with the service and want to tip more, you can.
With that said, workers in the US tend to have significantly more bargaining power than those in countries with more diverse and relaxed labour laws.
This is a fantasy. https://www.vox.com/2014/4/18/5624310/martin-gilens-testing-...
>Those that drive corruption and cheating the max are the winners in this world
This is the status quo. All the rules are written to keep some very undesirable people in positions of power over you.