Where Your Money Really Goes When You Tip On Uber Eats And Grubhub

Casey Bond

The year 2019 is a magical time for homebodies, introverts and couch potatoes alike. Technology has all but eliminated the need to leave your house or speak to actual humans for just about any reason ― including eating. Thanks to on-demand food delivery apps, such as DoorDash, Uber Eats and Grubhub, you can have anything from breakfast burritos to Thai food delivered to your door in a matter of minutes.

But the last time you downed pad thai in the blissful quiet of your home, did you stop to consider the true cost of that convenience? Maybe not.

A recent New York Times article exposed what it’s really like to be a delivery person for these types of services, including the unfair tipping policy of one in particular: DoorDash. You might assume that when you tip your Dasher $3 for a speedy delivery, he pockets the full $3 in addition to whatever DoorDash promised to pay. However, it turned out that DoorDash was using tips to subsidize workers’ base pay. In other words, if the service promised to pay your delivery person $10 for the order and you tipped $3, he’d still get only $10 ― and DoorDash would only have to shell out $7.

The backlash following this discovery has been so great that DoorDash decided to change its policy. Chief Executive Tony Xu took to Twitter on July 23 to explain how the company will allocate tips in the future.

That’s good (albeit long overdue) news for Dashers, but you may be left wondering where your tips go when using similar services. Below is a breakdown of the tipping policies for similar delivery apps.

Uber Eats

Tipping wasn’t always a built-in feature of Uber’s apps. In fact, it was implemented only a little over two years ago.

According to the Uber Eats website, tips are not expected. Customers who want to include a tip with their payment can do so via the app during checkout or when rating the delivery person. Cash tips are also welcome.

Additionally, tips never supplement drivers’ base pay. “Whatever you tip, however you tip, 100% always goes to your driver or delivery partner with Uber or Uber Eats. They’ve earned every dollar,” said Daniel Danker, head of driver product at Uber. Since launching tipping on Uber and Uber Eats, drivers and delivery partners have made nearly $2 billion in tips on top of their earnings.

Grubhub/Seamless

Food delivery services Grubhub and Seamless (which is owned by Grubhub) encourage tipping. In fact, Grubhub’s guide to tipping states that 20% of the total order cost is a standard amount to give, and you should never tip less than $5. It adds that you should throw in a little extra for complex delivery requirements or bad weather.

Fortunately, you can rest assured that if you do tip generously, the full amount will go to your delivery person. Katie Norris, senior manager of corporate communications at Grubhub, said 100% of tips go to the driver. “We determine a driver’s per-order pay independently and separately from any tips he or she receives,” she explained. “We pay drivers per order ― rather than hourly ― and any tip is in addition to the per order pay, not a substitute in any way.”

Postmates

One of the nice features of the Postmates app is that it doesn’t prompt you to leave a tip until after your order has been delivered. This way you don’t end up tipping more or less than you’d like to based on the service. Customers aren’t able to place new orders until action is taken at the tipping stage.

Postmates confirmed that members of the Postmates fleet always retain 100% of their tips, and customer tips will never be used to eat into their base earnings.

Amazon Flex

Drivers who deliver orders through Amazon delivery apps, such as Prime Now and Whole Foods, receive payment through Amazon’s Flex program. Its website states drivers earn $18 to $25 per hour but is less transparent regarding how tips are applied.

In public statements, Amazon has said that workers keep 100% of their tips. However, the Los Angeles Times recently reported that Amazon often dips into tips in order to meet guaranteed wages, writing in multiple emails to employees: “We add any supplemental earnings required to meet our commitment that delivery partners earn $18-$25 per hour.”

Amazon didn’t respond to our request for details regarding its tipping policy.

Caviar

Caviar, the on-demand food delivery app from mobile payment company Square, does not require diners to tip couriers. However, when they do, none of that money goes to the company.

“Couriers delivering with Caviar are paid a base rate and tip. Caviar does not reduce the base pay for an order if a customer tips more, and 100% of tips given by diners are passed on to the courier,” said Katie Dally, communications lead for Square’s financial services products.

Instacart

Unlike the other services mentioned, Instacart exclusively delivers grocery store orders. It’s a lot more involved since workers actually do your shopping for you in addition to delivering it. That’s why Instacart received similar criticism to DoorDash and decided to update its payment and tipping practices earlier this year.

Payment by Instacart is based on the time, effort and driving distance it’s estimated the order will require. Shoppers earn a minimum payment of $7 to $10 per full-service order and $5 per delivery-only order. A representative of Instacart said these payments are separate from and in addition to tips from customers that shoppers may receive based on service. Additionally, Instacart no longer uses customer tips to supplement a shopper’s payment; 100% of tips submitted through the Instacart app go directly to the shopper.

Your Tips Matter

Though the tipping policies of some delivery services are better than others, the truth is that the human workers behind these apps are often overworked and underpaid. As workers who can receive tips, their minimum wage could be as low as $2.13 depending on the state. And as independent contractors, they don’t receive any benefits.

Tips might seem like an added bonus for whoever is delivering your food, but many depend on those tips to make ends meet. So the next time you order delivery through your phone, be sure to compensate the person making your life that much easier and choose a service that lets them keep 100% of what you give.

CORRECTION: A previous version of this article stated that Instacart shoppers are compensated for mileage in addition to the initial batch payment. Mileage is included in the batch payment calculation.

Related Coverage

How To Tip In These 10 Confusing Situations

Here's How Much You Should Really Tip An Uber Or Lyft Driver

How To Properly Tip Housekeepers, Bellhops And Other Hotel Staff

Also on HuffPost

Roll Over Your Old 401(k)

“Employees should consider rolling over an old 401(k) or 403(b) <a href="https://www.huffpost.com/topic/retirement">retirement</a> plan into an IRA, which typically takes a matter of minutes. Though the money in the old plan will continue to grow tax-deferred, investors can end up paying much higher fees in an employer-sponsored retirement plan such as a 401(k) due to expensive fund options and plan administration costs. Those fees eat directly into an individual’s potential return. The savings can be significant if you switch to an IRA — even close to 1 percent in some cases. Over time, that can really add up.” ― <i>Kristin McFarland, a wealth advisor and certified financial planner at <a href="https://darrowwealthmanagement.com/" target="_blank" rel="noopener noreferrer">Darrow Wealth Management</a> in Boston.</i>
“Employees should consider rolling over an old 401(k) or 403(b) retirement plan into an IRA, which typically takes a matter of minutes. Though the money in the old plan will continue to grow tax-deferred, investors can end up paying much higher fees in an employer-sponsored retirement plan such as a 401(k) due to expensive fund options and plan administration costs. Those fees eat directly into an individual’s potential return. The savings can be significant if you switch to an IRA — even close to 1 percent in some cases. Over time, that can really add up.” ― Kristin McFarland, a wealth advisor and certified financial planner at Darrow Wealth Management in Boston.

Switch Banks

“If you aren’t earning at least 1 percent on your savings, you’re leaving money on the table. By simply switching from a traditional brick-and-mortar bank to a high-yield <a href="https://www.huffpost.com/topic/savings-account">savings account</a>, you can make your money work harder for you and earn on your savings effortlessly. It takes just a few seconds to compare interest rates between financial institutions to find the best option for you; opening a high-yield online savings account can be done in a matter of minutes.” ― <i>Andrea Woroch, <a href="http://www.andreaworoch.com/" target="_blank" rel="noopener noreferrer">consumer savings expert</a></i>
“If you aren’t earning at least 1 percent on your savings, you’re leaving money on the table. By simply switching from a traditional brick-and-mortar bank to a high-yield savings account, you can make your money work harder for you and earn on your savings effortlessly. It takes just a few seconds to compare interest rates between financial institutions to find the best option for you; opening a high-yield online savings account can be done in a matter of minutes.” ― Andrea Woroch, consumer savings expert

Negotiate With Your Internet Provider

“Call your internet provider and negotiate your bill. Let them know your budget has changed and you are shopping around. Providers usually have some sort of special promotion going on that they’ll offer you. For example, my provider once offered a huge discount for college students and gave us our internet for half price during the school year. Spending 10 minutes on the phone saved us around $300-$400.” ― <i>Jaime Gibbs, a faith and finance blogger at </i><a href="http://likeabubblingbrook.com/"><i>Like a Bubbling Brook</i></a>
“Call your internet provider and negotiate your bill. Let them know your budget has changed and you are shopping around. Providers usually have some sort of special promotion going on that they’ll offer you. For example, my provider once offered a huge discount for college students and gave us our internet for half price during the school year. Spending 10 minutes on the phone saved us around $300-$400.” ― Jaime Gibbs, a faith and finance blogger at Like a Bubbling Brook

Complete A Health Assessment

“Many people don’t realize that their health insurance provider offers the option to complete a health assessment, which means they miss out on hundreds of dollars each year. Ours has typically been a simple online survey that takes about 20 minutes to complete. In exchange (no matter what the results), we get $150 in gift cards for every insured person over 18.” ― <i>Val Breit, owner of personal finance blog </i><a href="http://thecommoncentsclub.com/"><i>The Common Cents Club</i></a>
“Many people don’t realize that their health insurance provider offers the option to complete a health assessment, which means they miss out on hundreds of dollars each year. Ours has typically been a simple online survey that takes about 20 minutes to complete. In exchange (no matter what the results), we get $150 in gift cards for every insured person over 18.” ― Val Breit, owner of personal finance blog The Common Cents Club

Sign Up For Auto-Pay

“If you follow a reasonable budget, setting your bills to auto-pay is a great way to save time and money. Start by looking at your monthly mandatory expenses and find a company that incentivizes customers to sign up for automatic billing. Usually, they’ll offer a reduced interest rate or discounts on future transactions, depending on what type of bill it is. If you’re going to have to pay a bill eventually, why not get a discount for doing it automatically? Common places to find discounts can include student loans, car loans or utilities such as your electric bill. And the biggest perk? You don’t have to worry about remembering to pay the bill in full each month ― it’s all taken care of.” <i>― Ben Huber, owner of </i><a href="https://www.dollarsprout.com/"><i>Dollar Sprout</i></a>
“If you follow a reasonable budget, setting your bills to auto-pay is a great way to save time and money. Start by looking at your monthly mandatory expenses and find a company that incentivizes customers to sign up for automatic billing. Usually, they’ll offer a reduced interest rate or discounts on future transactions, depending on what type of bill it is. If you’re going to have to pay a bill eventually, why not get a discount for doing it automatically? Common places to find discounts can include student loans, car loans or utilities such as your electric bill. And the biggest perk? You don’t have to worry about remembering to pay the bill in full each month ― it’s all taken care of.” ― Ben Huber, owner of Dollar Sprout

Rethink Your Health Insurance

“Re-evaluate your health insurance options at work since now is enrollment time. What did you sign up for in the past that you now don’t need? For example, I knew someone who had health insurance and cancer insurance. The cancer insurance, which she did not need, was $100 a month. She removed it for instant savings.” <i>― Ja’Net Adams, speaker, author and creator of </i><a href="https://www.debtsucksuniversity.com/"><i>Debt Sucks University</i></a>
“Re-evaluate your health insurance options at work since now is enrollment time. What did you sign up for in the past that you now don’t need? For example, I knew someone who had health insurance and cancer insurance. The cancer insurance, which she did not need, was $100 a month. She removed it for instant savings.” ― Ja’Net Adams, speaker, author and creator of Debt Sucks University

Skim Your Bank Statements

“Spend 30 to 60 minutes one evening and review your past two to three months of bank statements. You might find your bank is charging you monthly maintenance fees that can be avoided and save you a couple hundred dollars a year. One way to avoid monthly fees is to enroll in direct deposit or, if you can, keep at least $1,000 in your checking account.” ― <i>Jason Reposa, CEO and co-founder of </i><a href="https://www.mybanktracker.com/"><i>MyBankTracker</i></a>
“Spend 30 to 60 minutes one evening and review your past two to three months of bank statements. You might find your bank is charging you monthly maintenance fees that can be avoided and save you a couple hundred dollars a year. One way to avoid monthly fees is to enroll in direct deposit or, if you can, keep at least $1,000 in your checking account.” ― Jason Reposa, CEO and co-founder of MyBankTracker

Listen To A Personal Finance Podcast

“There are many out there, which can be from a few minutes long to almost an hour. These types of podcasts will greatly impact your knowledge and help you to learn how to save money at no cost to you. And you also aren’t spending hours to learn, either. It’s something I do each week and has helped me make smarter money choices.” ― <i>Todd Kunsman, founder of <a href="https://investedwallet.com/" target="_blank" rel="noopener noreferrer">Invested Wallet</a></i>
“There are many out there, which can be from a few minutes long to almost an hour. These types of podcasts will greatly impact your knowledge and help you to learn how to save money at no cost to you. And you also aren’t spending hours to learn, either. It’s something I do each week and has helped me make smarter money choices.” ― Todd Kunsman, founder of Invested Wallet

Switch To A Prepaid Cellphone Plan

“Call your cellphone provider and ask about their prepaid pricing plans. With a few minutes on the phone, you can save $15 or more per month ($180+ per year), plus increase your data limit. After switching to prepaid, we saved $15 a month and increased our data from 3GB shared to 10GB each (20GB total).” <i>― Evan and Nikayla, the bloggers behind </i><a href="https://budgetingcouple.com/budgeting/"><i>Budgeting Couple</i></a>
“Call your cellphone provider and ask about their prepaid pricing plans. With a few minutes on the phone, you can save $15 or more per month ($180+ per year), plus increase your data limit. After switching to prepaid, we saved $15 a month and increased our data from 3GB shared to 10GB each (20GB total).” ― Evan and Nikayla, the bloggers behind Budgeting Couple

Set It And Forget It

“Using an app like <a href="https://www.acorns.com/" rel="nofollow">Acorns</a> can take less than 10 minutes to set up and will continuously save (and actually invest) money every time you make a purchase. Acorns works by rounding up each transaction to the nearest dollar and investing the difference for you automatically. It’s a simple and quick way to get a method of saving and investing money every single day in place.” ― <i>Dustyn Ferguson, blogger at </i><a href="https://dimewilltell.com/"><i>Dime Will Tell</i></a>
“Using an app like Acorns can take less than 10 minutes to set up and will continuously save (and actually invest) money every time you make a purchase. Acorns works by rounding up each transaction to the nearest dollar and investing the difference for you automatically. It’s a simple and quick way to get a method of saving and investing money every single day in place.” ― Dustyn Ferguson, blogger at Dime Will Tell

Love HuffPost? Become a founding member of HuffPost Plus today.

This article originally appeared on HuffPost.