Increased pay for delivery workers resulted in less tips

Increased pay for delivery workers results in less tips

It was supposed to be a big win for delivery workers in New York City, but a new law requires that they be paid a certain wage. This has come with some unintended consequences, including one of them being that they earn fewer tips. FOX 5 NY’s Jessica Formoso spoke with a New York City council member who is trying to reverse this trend.

NEW YORK CITY - NYC Councilman Shaun Abreu is proposing a bill that will make it easier to tip deliveristas on food delivery apps. It's a two-measure bill:

To allow app users to tip at checkout
To set a minimum gratuity of 10% of an order's total

It was supposed to be a big win for delivery workers in New York City, but a new law requires that they be paid a certain wage.

This has come with some unintended consequences, including one of them being that they earn fewer tips.

As of last week, app-based food delivery workers are getting $19.56 an hour. The pay increase was a big win for "deliveristas", the delivery men and women who have been pushing for higher wages, but with the bump in pay came a reduction in tips.

NEW YORK, NY - DECEMBER 29: A food delivery guy with bicycle is seen at the Times Square in New York City, United States on December 29, 2021. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)

"When the minimum wages went into effect, the tipping options were removed at checkout. And you have apps like DoorDash and Uber where tipping is only allowed after the meal is done. And we see that first as a disincentive and discouraging people from tipping," Abreu said.

"What we're calling for is transparency and tipping, so that before you place your order, the consumer has the option to tip. It's not a requirement to tip, and people can exercise their choice as consumers, and this comes at no cost to employers," he said.

Michael Angel has been delivering for two months and says he depends on those tips.

The same goes for Sebastian Garcia, who tells us he’s been working since 6 a.m. and now at 3 p.m. he’s only made $63. He told FOX 5 that people would tip him $10 to $15 for each delivery. Today he made $3.

"Minimum wage only exists for people who for delivery starts who are working active time. So if you're waiting on an order, for instance, and you're in the waiting portal, you're not getting minimum wage. You only get minimum wage for active-time work. That's when you're delivering the meal from door to door. So it's not actually necessarily true that people are making the minimum wage hourly," the councilman said.

DoorDash made its changes in December. The option to tip in the DoorDash app is now after checkout. DoorDash said in a statement to FOX 5:

"In order to better balance the impact of these new costs...this change comes as a recommendation by the NYC Department of Consumer and Worker Protection and has been done to help ensure our platform remains affordable for all New Yorkers."

A spokesperson for Uber Eats said, "haven’t seen the bill yet, but seems odd the councilmember wants to require New Yorkers to tip delivery workers that make $20/hr by law and not those that make $10.65/hr by law."

Seamless did not get back to us.

Councilmember Abreu will introduce the bill on Thursday.

New York City Consumer