Restaurant Workers Lose Tips to Third-Party Delivery Drivers

Here’s one more reason to end tipping culture: apps like Postmates are disrupting the food service industry at the cost of tipped food service workers.

Seattle’s The Stranger explains:

Here’s how the system works: Customers place orders through the Postmates app, which includes a delivery charge ($5 for Postmates’ merchant partners and a varying fee based on distance for everyone else) and a flat 9 percent “service charge.” The delivery fee is split 80/20 between the driver and Postmates, respectively. Most people would logically assume that the 9 percent service fee goes to the hardworking people slathering mayonnaise on your sandwich. Sadly, they would be wrong. According to Postmates spokesperson April Conyers, that fee goes to “the company and is applied toward operations.”

I’m not a “most person” in this case, because I never thought that the service fee went towards anything but the company behind the app. I do order regularly from Eat24 — an appropriate confession on the first day of The Billfold’s financial vices month — and I tip over 20 percent on pretty much everything I order. (I just checked my recent Eat24 orders to confirm this. My last three tips were 26 percent, 22 percent, and 22 percent.)

But those tips are for the delivery drivers, not the restaurant workers — and that money might not even get to the drivers. Delivery drivers are currently suing Yelp, who owns Eat24, over tip theft. As Fortune reports:

According to a complaint filed in San Francisco federal court, Eat24 encouraged its customers to enter a tip amount for the food they ordered, but then failed to pass on that money, or even notify the drivers of the tip in the first place.

The purported class action complaint was filed by Steven Kay of Oakland and Esteban Polonski of South San Francisco, who are seeking money from Yelp on behalf of other drivers across the country. Both men say they work for the car-hire service SideCar.

Yelp has since responded to the lawsuit with an email statement, suggesting the drivers’ quarrel may instead be with Sidecar:

“This case appears to be brought by drivers who contract with Sidecar to deliver food for orders made through Eat24. To be clear, neither Yelp nor Eat24 hire or contract with any delivery drivers. For Sidecar-made deliveries, Eat24 sends all tips to Sidecar, who we understand then distributes those tips to Sidecar drivers. We believe this lawsuit has no merit.”

Talk about literally passing the buck.

But okay, here’s what we know: when you buy food from a third-party delivery app, you have the option to tip. That money may (or may not) end up in the pockets of the delivery driver. No tip money ends up in the pockets of restaurant servers, even though they are very likely to be involved in putting together your delivery order in between serving tables. (Not everyone in a restaurant cooks, but everyone helps with prep.)

As The Stranger notes, restaurant servers often pool their tips with the bar and with the back of house team. When you order delivery directly from a restaurant, your tip goes to that pool of workers; but tips that go directly to third-party delivery teams means that restaurant workers’ paychecks drop almost across the board.

The Stranger quoted one restaurant owner who thought that Postmates’ delivery drivers should be required to tip out the back of house, just like servers do. But there’s no way that’s going to happen. We’re barely getting used to the idea that McDonald’s franchise employees could also be considered McDonald’s employees; no Postmates delivery driver is going to assume he or she has any obligation to pool tips with a restaurant. (Restaurant workers might get paid the federal minimum tipped wage of $2.13 an hour, but gig economy workers have no guaranteed hourly rate at all.)

Is it possible to tip a restaurant through one of these third party apps? Let’s quote The Stranger:

Technically, Postmates’ system does allow for tipping restaurant workers, but most customers wouldn’t know that because the mechanism to do so isn’t clear. You could either leave special instructions in the notes field or add a tip as a “custom order.” But Corey Crammond, a former community manager for Postmates in Seattle whose job was to provide internal customer service to Postmates’ fleet of more than 600 couriers, said that in the thousands of deliveries he’d reviewed, he’d seen a customer do this “maybe once.”

I’m curious what would happen if I left a tip as a “custom order” the next time I ordered through Eat24. Would the $3 filter down through the system and actually make it into the hands of a server?

Also, can you even leave that kind of off-menu custom order? (I poked around Eat24 and couldn’t figure out how to do it.) Or would you have to pretend-order something else? If I were a server, and I saw that someone had ordered a side order of steamed vegetables and left a note reading “THIS IS A TIP, PLEASE DO NOT GIVE ME VEGETABLES,” I would have to stop what I was doing, go find my manager, explain the whole thing, and hope that the manager would be able to open up the register and give me $3, or something. I mean, I couldn’t tip out at the end of the day on something coded as a line item. It would have to get treated as a special circumstance.

Anyway. Tipping culture is broken, and it was partially broken before the Postmates of the world showed up, but now it’s just that much worse for everybody. Also, do any of the food delivery apps you use allow you to tip restaurant servers directly?

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