A new NYC bill proposed this week is once again putting third-party delivery services’ tipping policies under scrutiny, according to an article from the New York Daily News. Specifically, the proposed law is aimed at transparency around how much of the tip on any given delivery order actually goes to the delivery worker as, well, a tip.
New York City Council member Richie Torres introduced the legislation on Wednesday that would, according to the NY Daily News, require third-party delivery services to “notify customers if gratuity is paid to delivery workers in addition to their regular wage – or if tips are put toward their base pay.”
Speaking strictly of third-party restaurant-food delivery companies, the proposed legislation seems aimed specifically at one. In July of last year, DoorDash received a storm of bad press over its then-tipping policy, which used money from workers’ tips to meet the minimum guaranteed base pay.
Though the company eventually changed that much-maligned tipping policy, D.C. Attorney General Karl Racine later brought charges against DoorDash, claiming the old tipping model mislead consumers about where their money was going.
Torres’ proposed legislation seems as much aimed at protecting workers as it is about transparency towards customers about where their money goes. In a tweet Wednesday, he wrote:
#NYC can no longer afford to turn a blind eye to app-based delivery companies stripping workers of their hard-earned tips. It’s wage theft, plain & simple, and the public has a right to hold businesses accountable for exploiting their workers and stealing their wages.
He also told NY Daily news that there’s “a special place in hell for companies that confiscate the tips of low-wage workers,” adding that tips are “profits for the companies – dollars the companies should be paying workers out of their own profits.”
If the legislation is approved, all third-party delivery companies, including DoorDash competitors Grubhub and Uber Eats, would have to comply by disclosing their tipping policies in their terms of service or via some other method before a transaction is processed. Failure to do so would result in services being charged penalties.
DoorDash competitors Uber Eats and Grubhub would be on the hook to comply, as presumably would a service like Instacart, which has also come under fire recently for questionable tipping policies for workers.
A spokesperson for DoorDash said in a statement that “100% of [a] tip goes directly to the Dasher who earned it — in addition to the base pay our company offers for each delivery.” He also added that DoorDash shares “in Council member Torres’ commitment to transparency and we look forward to working with him to ensure the highest quality experience for our customers and workers.”
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