The recent ruling of the NYC court on the minimum wage payment to Uber and DoorDash delivery guys is hitting them hard, even though they won the case.
The court directed the companies to pay a minimum hourly wage to their gig workers but left the tipping option open for change. Leveraging this, Uber and DoorDash are making customer tipping optional or low to make their orders affordable – which cuts the extra pay for delivery workers.
No Tips After Fixed Hourly Pay
Food delivery companies in the US like Uber, DoorDash and GrubHub have long maintained the relationship with their delivery partners as contractors – which means they’re self-employed rather than employees. While it gives riders the freedom to work however they like, it cuts the benefits their company owe under the state employment policy.
Yet, they agreed to this setting and continued working all this while. But arguing that the companies are paying too low for an hour, they approached the court to increase this bar. And succeeded, but at the cost of tips – their variable yet significant pay.
Ruling that gig workers should be paid the minimum wage of $17.96 per hour, the NYC court has let the food delivery companies alter their tipping policies if needed. And this is triggering the delivery community – as Uber and DoorDash are making it harder for gig workers to earn tips from now on.
Earlier, customers had to specify the tip they planned to pay the driver while placing an order. Drivers could see the tip amount to prioritise their jobs accordingly, like delivering the order first which earns a hefty tip, while delaying the order which tips low.
But now, as they’re directed to receive a minimum hourly wage(at $17.96) – which the companies think as too much – they’re being cut from the tips! DoorDash altered it’s tipping policy to let the customers tip after the delivery – where most pay low or nothing. Whereas Uber has kept the tipping bracket completely optional!
Both companies argued that setting a minimum hourly wage for workers would increase their costs – which they had to pass on to the customers, eventually. As this would increase the order value gradually, the only way to keep it affordable is by making tipping optional or low.
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