Food delivery couriers in New York City have seen their tips collapse by a staggering sum exceeding $550 million since 2023, with workers for platforms like DoorDash and Uber Eats now receiving a paltry average of just 76 cents per order. This dramatic decline is directly linked to changes in the apps' customer interfaces, which made leaving a gratuity more difficult.
The Tipping Point: How App Design Slashed Gratuities
The city's Department of Consumer and Worker Protection (DCWP) has pointed the finger at the delivery companies, accusing them of deliberately moving tipping prompts to a point after customers had completed checkout. This subtle but significant shift led to a sharp drop in voluntary contributions from New Yorkers. The situation became so severe that the DCWP intervened with new amendments, mandating that apps must present tipping options during the checkout process from 26 January onwards.
Minimum Pay Rise Offsets Some Losses
While tips were vanishing, couriers' overall pay packets did receive a substantial boost from another regulatory change. In December 2023, the enforcement of a city-mandated minimum pay rate came into effect, raising the hourly wage for delivery workers to $21.44. This policy injected an estimated $1.2 billion in additional earnings into the workforce. However, this gain was severely undermined by the simultaneous collapse in customer tips, highlighting the complex financial reality for gig economy workers.
Legal Battles Loom Over New Rules
The new regulations requiring pre-checkout tipping are projected to increase delivery worker earnings by a further $390 million annually. Yet, the path to this recovery is not smooth. Both DoorDash and Uber have launched legal challenges against New York City, contesting the latest requirements. This sets the stage for a protracted fight over the future of pay and conditions in the rapidly growing food delivery sector. The core of the dispute revolves around whether the apps' design choices unfairly suppressed voluntary customer payments, a claim the companies dispute.
The figures paint a stark picture of change: where New Yorkers once tipped a few dollars per order, the average gratuity on DoorDash has now fallen to less than a dollar, representing a drop of around $3 per order compared to just a few years ago. The outcome of the impending legal battles will be closely watched, not just in New York, but by regulators and gig workers worldwide.
