DASH Faces Regulatory Scrutiny Over Tipping Policy Changes Affecting NYC Delivery Workers

The New York City Department of Consumer and Worker Protection (DCWP) found that tipping interface redesigns by Uber Eats and DoorDash led to a $550 million decline in delivery worker earnings since December 2023.

The average tip per delivery on these platforms fell from $3.66 to $0.76, while platforms retaining traditional tipping options saw an average of $2.17 per delivery.

DoorDash claims the changes were publicly announced and align with standard industry practices, arguing that total worker earnings increased by $1.2 billion under the city's minimum pay law.

The redesign of Uber Eats and DoorDash's tipping interface has significantly impacted delivery workers in New York City. According to the DCWP, the changes made it harder for consumers to leave tips, which led to a drop in average tip earnings per delivery. The redesigned system was introduced in December 2023, coinciding with the city's new minimum pay law for delivery workers. The DCWP described this as a "massive scheme" to undermine worker pay, , citing algorithmic manipulation as a key factor.

DoorDash and Uber Eats have both challenged the findings, with DoorDash arguing that the changes were not intended to reduce worker pay. The company maintains that the new wage regulations forced the removal of a simplified tipping option and that the changes are consistent with industry practices. Uber Eats did not provide a public statement, but DoorDash emphasized that total delivery worker earnings have increased by $1.2 billion since the new pay law was implemented.

The controversy has led to legal action, with DoorDash and Uber Eats challenging the new tipping laws in court. The DCWP is enforcing a requirement that tipping options be available at checkout with a default 10% tip. The agency is committed to ensuring that workers are not exploited by corporate algorithms and that consumers retain the ability to tip without hidden barriers.

What Impact Have the Interface Changes Had on Delivery Workers?

The interface changes implemented by Uber Eats and DoorDash in December 2023 were designed to move tipping options to after checkout, making it more difficult for consumers to leave tips. According to the DCWP, this led to a significant drop in average tip earnings per delivery. The average tip per delivery on these platforms fell from $3.66 to $0.76, while platforms like GrubHub, which retain their tipping interface unchanged, saw an average of $2.17 per delivery.

Delivery workers on these platforms have lost an estimated $5,800 per year in tip earnings, according to the DCWP report. This has had a significant impact on their overall compensation, particularly in a market where tips can constitute a large portion of total income. DoorDash and Uber Eats have both disputed these figures, arguing that total worker earnings have increased under the city's new minimum pay law.

How Are Uber Eats and DoorDash Responding to the Allegations?

Uber Eats and DoorDash have both pushed back against the DCWP's findings. DoorDash claims the changes were made in compliance with new wage regulations and that the tipping interface changes were publicly announced in December 2023. The company also argues that the DCWP's 2022 study suggested that apps could reduce consumer costs by changing the user interface to discourage or eliminate tipping. DoorDash further notes that delivery workers now earn a guaranteed $21.44 per hour plus tips, which it says reflects a significant increase in worker compensation.

Uber Eats has not publicly commented on the allegations, but DoorDash criticized the new tipping laws as ones that prevent consumers from considering the quality of service when deciding whether to tip. The company has also argued that these laws violate its free speech rights. The legal battle over these changes highlights the growing tension between gig platforms and regulators, particularly in cities like New York where labor laws are evolving.