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<\/p>\nNEW YORK (BLOOMBERG) — DoorDash Inc. and Uber Technologies Inc. have deprived New York delivery workers of more than $550 million in tips after changing the interfaces on their apps, according to findings released in a report from a city agency.<\/p>\n
Mayor Zohran Mamdani\u2019s administration said the companies moved tipping prompts to less prominent locations in their apps after new pay standards for delivery workers took effect in December 2023. At the time, the apps raised customers\u2019 service fees to subsidize the new pay rate and moved the in-app tipping function to after checkout so that the upfront delivery costs would seem lower.<\/p>\n
A spokesperson for DoorDash called the Department of Consumer and Worker Protection report \u201cflat out wrong,\u201d adding that their delivery workers always recieve 100% of tips placed through the app.<\/p>\n
\u201cMoving tipping to after checkout isn\u2019t novel or nefarious – it\u2019s how tipping works in many areas of life,\u201d John Horton, the company\u2019s head of North America public policy, said in an emailed statement. \u201cForcing people to tip may as well be a tax. It should be up to consumers, not politicians, whether they want to tip more in New York after already paying for a billion dollar raise for workers.\u201d<\/p>\n
A representative for Uber did not immediately reply to a request for comment.<\/p>\n
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Over the course of 18 months, the shift resulted in a $554 million loss in tip income \u2014 or roughly $5,800 per worker annually.<\/p>\n
Photo credit Bloomberg<\/p>\n
Average tips on both platforms fell to $0.93 per delivery from $3.66 within a week of the adjustments, the report released Tuesday said. Over the course of 18 months, the shift resulted in a $554 million loss in tip income \u2014 or roughly $5,800 per worker annually.<\/p>\n
Mamdani had campaigned during his mayoral run for better working conditions and treatment of delivery workers. After he took office earlier this month, he signed an executive order that cracked down on junk fees and misleading subscriptions in an event that named Uber and DoorDash as culprits.<\/p>\n
His push builds on a string of labor changes enacted under the administration of former mayor Eric Adams that were designed to support delivery workers. That includes new amendments to the city\u2019s delivery worker laws which require apps to provide more prominent tipping options, including allowing customers to tip during checkout and offering a selectable 10% tip suggestion.<\/p>\n