The end of ‘tipflation’? DoorDash and UberEats REMOVE prompts for gratuity in New York after city hiked minimum wage for drivers to $17.96 an hour

Food delivery giants UberEats and DoorDash are no longer pressurising customers in New York City to add tips – thanks to new minumum wage laws in the Big Apple. 

New minimum wage rates – up from $7.09 an hour to $17.96 – mean drivers in the city are now less reliant on gratuities. The rate will rise again to $20 by 2025.

UberEats and DoorDash both said that the option to tip will now be given after a customer in New York received their food – meaning they can still reward good service if they want.

Customers can feel pressurised into giving a tip up front for fear of bad service. DoorDash even warned those not tipping they might get a slower delivery.

Until the recent change – as is the case in other states – customers in New York were pushed to add a tip before completing  an order and paying for a meal. 

Food delivery giants UberEats and DoorDash are removing prompts to tip for customers in New York City thanks to new minimum wage laws in the Big Apple

Drivers in the city are now less reliant on gratuity to make a living after their minimum wage was nearly trebled from $7.09 an hour to $17.96, under new laws brought in by mayor Eric Adams.

Both firms were extremely critical of the new minimum wage as they warned customers would ultimately pay the price.

In a statement, a DoorDash spokesman said: ‘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 use our platform.

‘These new regulations will force us to raise fees for orders in New York City. In order to better balance the impact of these new costs, we’re moving the option to tip in the DoorDash app to after checkout.’

The decision to remove gratuity came from a recommendation from the NYC Department of Consumer and Worker protection.

UberEats similarly said: ‘As suggested by the City of New York, the option to tip in the Uber Eats app will now only be available to customers after their order has been delivered.’

The decision to raise minimum wages for fast food couriers was sparked by concerns they were struggling to earn a fair living.

App-based delivery drivers are treated as independent contractors rather than company employees meaning minimum wage laws do not apply to them.

As a result they earn around $11 an hour on average after expenses, according to Reuters – well below the city’s $15 minimum wage. 

Under new laws, apps have the choice whether to pay their employees in New York hourly or just for trip time. The latter would mean paying drivers approximately 55 cents a minute – or $33 an hour. 

DoorDash drivers in New York can now expect a wage of $29.93 for every ‘active’ hour they work while UberEats couriers will be paid $23.93. 

Active hours refer to the time spent picking up and delivering the food – though they are not paid for the time they spend waiting for orders to come through. 

Uber, DoorDash, Grubhub and Relay Delivery all launched appeals against the ruling, claiming the law would eliminate jobs and reduce tipping. 

But a New York state appeals court last week denied their case without explanation. 

And earlier this year an exclusive survey by DailyMail.com found more than half of Americans believe we are living in an ‘era of tipflation’

Mayor Adams welcomed the news as a victory for workers. 

‘This minimum pay rate will guarantee our delivery workers and their families can earn a living and keep our city’s legendary restaurant industry going strong,’ he said in a statement. 

It comes after a widespread backlash against rampant ‘tipflation’ which has seen prompts for gratuity spill out from bars and restaurants and into coffee shops and even self-service kiosks. 

The trend has been in part sparked by the mass-adoption of iPad checkout screens which offer customers the chance to tip. Such systems boomed in popularity during the pandemic when retailers stopped accepting cash due to fears notes could spread Covid-19 germs. 

Last month a study by the Pew Research Center found that 72 percent of Americans think prompts to tip are more widespread than in the past. 

And earlier this year an exclusive survey by DailyMail.com found more than half of Americans believe we are living in an ‘era of tipflation.’

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