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DOORDASH, DELIVERY APPS REMOVE TIPPING PROMPT AT CHECKOUT IN NYC

DoorDash said it made the change due to "the impact of bad policies in NYC."

By
Kelly McCarthy
via
December 7, 2023, 4:55 PM ET
• 5 min read

DoorDash warns customers about not tipping amid new pilot programThe food
delivery app is testing a new program to encourage more tipping of their
delivery drivers, telling users their orders might take longer if they don't
tip.Anadolu Agency via Getty Images, FILE

DoorDash and Uber Eats issued statements this week announcing changes to their
respective tipping policies in response to a new minimum wage increase for
app-based food delivery workers in New York City.

Earlier this fall, the New York State Supreme Court ruled that "apps should
immediately pay delivery workers the Minimum Pay Rate of at least $17.96 per
hour," according to the New York City Department of Consumer Worker Protection.



In a statement in late November, following the state Supreme Court decision,
Vilda Vera Mayuga, commissioner of the New York City Department of Consumer and
Worker Protection, hailed the ruling, saying, "The minimum pay rate of at least
$17.96 per hour will help lift thousands of New Yorkers and their families out
of poverty, while still allowing flexibility for both apps and workers ... We
thank the court for making the right decision and thank the hundreds of delivery
workers who fought for their right to earn a dignified wage."


In this May 1, 2023, file photo, the DoorDash app is shown on a smartphone in
Hastings-on-Hudson, New York.Tiffany Hagler-Geard/Bloomberg via Getty Images,
FILE

Maria Torres-Springer, deputy mayor for Housing, Economic Development, and
Workforce, added separately, "Delivery workers are a critical part of our city’s
workforce and play a critical role in our local economy, yet to date, they have
not been able to earn a living wage. We are grateful for the appellate court’s
decision today and expect the delivery apps to start implementing the minimum
pay rate immediately. When we lift up working New Yorkers, the whole city
succeeds."

In what they said was a direct result of that ruling, DoorDash and Uber Eats
announced plans on Monday for New York City customers that do away with the
formerly standard tipping prompt on the checkout page of the apps and add a new
service fee to each transaction. Customers can still choose to include a tip
once the delivery has been completed, and both companies assured delivery
drivers that they will receive 100% of those tips.

While some consumers unaware of the city's changes may have been caught off
guard, DoorDash made an extensive push to explain how its updates would allow it
"to better balance the impact of bad policies in NYC for everyone who uses our
platform."


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"As we have repeatedly made clear in recent months, the ill-conceived, extreme
minimum pay rate for food delivery workers in New York City will have
significant consequences for everyone who uses our platform," DoorDash said in
statement about its New York City customer experience. "Unfortunately, these
regulations will significantly increase the costs of facilitating delivery in
NYC and force us to make a number of operational changes, which is why we're
providing an update on what local consumers and Dashers will be seeing beginning
today."

When the earnings standard was announced in June, DoorDash issued a statement
saying the outcome would create unpopular consequences for the delivery worker
experience.


In this Feb. 18, 2021, file photo, a food delivery worker is seen as snowfall
blankets the area in New York.Anadolu Agency via Getty Images, FILE

In order to meet the new minimum pay rate, DoorDash said at the time that its
platform and others would "have to increase costs on each order or reduce
services in New York City," stating that other impacts of the coming changes
could include fewer opportunities for Dashers to work when they choose,
customers potentially priced out of orders, and possible jobs lost at local
restaurants.

DoorDash, Uber Eats and Grubhub set out on a united front earlier this year to
argue against the City Council measure in an effort to block such pay raises,
but failed when New York Acting Supreme Court Justice Nicholas Moyne rejected
those arguments.

"Policies have consequences, and these changes come as a direct result of the
extreme earnings standard imposed in New York City," a DoorDash spokesperson
told "Good Morning America" on Thursday. "The City itself acknowledged that
platforms could make changes to our tipping structure to help meet the
significantly increased costs, which is exactly what we're doing and therefore
should come as no surprise."

They added, "We're hopeful that these changes will allow us to better balance
the impact across everyone who uses our platform and continue providing the best
possible experience as we explore further changes to the platform in the months
to come."

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