Why Tipping Can Be Confusing

Whereas most of us know what to tip at a sit-down restaurant, delivery is still unknown territory.

Food Delivery Workers: Tips

Offered an $8 tip, a New York DoorDash delivery driver from Long Island asked for more. Told no, she said she would return the food.

Somewhat similarly, a California driver for Uber Eats anticipated a lucrative evening. However, after a $388 sushi and miso soup delivery, he received just $20 (5 percent). Added to $10 from the first drop off and nothing from a second one, the evening netted him a few dollars from Uber and a disappointing $30.

Ranging from nothing to the $70 expected for a $400 meal, tipping territory is huge for food delivery.

Food Delivery Workers: Classification

Tipping is not the only dilemma facing delivey people. In California, the debate continues about whether the person that takes your meal to your door is an employee or an independent contractor. From the employee perspective, the difference for pay, benefits, and expense reimbursement is immense. However, Uber, DoorDash and their siblings say they support continued contractor status to maintain flexible schedules for their workers.

Based on a March 2023 decision, California’s Proposition 22 still validates the firms’ quest to define their workers as contractors rather than employees. They needed to clarify the law after the California legislature had declared workers were employees. Then though Prop 22 passed and said they were not. However, the court’s newest decision has given unions a pathway to organize the group. We can add to the confusion with a March 30th ruling that said a Grubhub worker was an employee because the case entered the courts before Prop 22 passed. And still, it is possible that the California Supreme Court, the legislature, and even a new ballot initiative could shift where we stand now.

Our Bottom Line: Social Norms

While I’ve touched only some tipping territory, it definitely is located in the heart of behavioral economics. As a social norm, the size of a tip depends on what we think we are expected to do. However, the size of that tip can also depend on whether the person is a gig worker or an employee.

My sources and more: Recent articles from the NY Times and NY Post on door delivery tips reveal our new behavior as did this econlife post. Actually though, this podcast from Business Daily took me back to tips. But then, talking about pay, we had to return, here and here,  And finally, for even more, here and here are what the U.S. Department of Labor might do.