Following a report critical of how DoorDash doles out tips to its delivery staff, the chief executive of the San Francisco-based food-delivery company said it will make major changes to its tipping policy that had been, in effect, cutting its employees out from many of their tips.
Tony Xu, DoorDash’s CEO, said on Twitter late Tuesday that his company would ensure that its employees, called “Dashers,” will soon see their earnings “increase by the exact amount a customer tips on every order,” instead of using tips to subsidize those employees’ base pay levels.
The brouhaha began with a New York Times story in which a reporter wrote about his experiences as a deliveryman for services such as DoorDash, Uber Eats and Postmates. The reporter described DoorDash’s tipping policy, in which tips left in DoorDash’s app were being used to complete minimum payments that the company had promised for its delivery staff.
The Times gave an example of how the policy worked: If DoorDash said it would pay $7 for a delivery, and a customer didn’t use the DoorDash app to provide a tip, DoorDash would pay the delivery person $7.
However, if the customer gave a tip of $3, DoorDash would pay the Dasher $4 directly, then add on the $3 tip for a $7 payment. When the Times report came out, many customers raised a stink about the matter because they were upset that their tips were going to the company instead of the DoorDash delivery man.
“We thought we were doing the right thing by making Dashers whole when a customer left no tip,” Xu said, on Twitter. “What we missed was that some customers who did tip would feel like their tip did not matter.”
At least one of DoorDash’s rivals was quick to take advantage of the company’s tipping flap. Postmates, also based in San Francisco, put out a statement saying that since it started seven years ago, it has always made sure that any and all tips from customers were given to its delivery staff.
“100% of your tips go to your Postmate,” the company said in a statement. “That’s both the right thing to do and something we will never waver on. After all, we named the company after the people who make your deliveries.”
DoorDash didn’t return a request for further comment about its tipping policy. On Twitter, Xu added that more details about the payment changes would be made public “in the coming days.”
(c)2019 The Mercury News (San Jose, Calif.), Distributed by Tribune Content Agency, LLC.