When a tip is not a tip

February 12, 2019 (2108 words) :: On DoorDash's institutionalised tip theft policy, and how that undermines the implicit contract that gives it legitimacy.
Tags: gig-economy, class-struggle, ideology

This blog post is from day 43 of a personal challenge to write something every day in 2019. See the other fragments.


Last Thursday, I wrote about Instacart’s decision to reverse a worker-hostile payment policy whereby tips would occasionally be used to offset the company’s payment to the worker, rather than staying entirely with the worker. In essence, the policy enabled de facto tip theft.

Now, tip theft is a fairly common occurrence in other industries (especially in restaurant work), but the practice takes on a different flavour when it comes to gig economy apps. For one, it can be implemented in a fully automated fashion with just a few lines of code, meaning that it can occur passively, and the people who benefit from the practice can do so without ever having to actively participate in it, or even know about it. For another, it completely undermines these companies’ already flimsy pretense of being good for workers (both Instacart and Doordash bill themselves as great ways to make money).

Last week, Instacart workers fought back against the policy of institutionalised tip theft, and they won. But Instacart wasn’t the only gig economy company doing this. DoorDash, a food delivery platform, switched to a similar policy back in 2017, and Amazon Flex does the same thing as well; neither seems interested in changing their policy. DoorDash’s official statement on the issue is especially egregious, and worth analysing further:

[…] Based on Dasher input, it was designed to ensure that Dashers are more fairly compensated for every delivery. DoorDash always pays Dashers a fixed base pay plus 100% of customer tips. We will continue to protect Dashers with boost pay in cases where earnings would otherwise be insufficient to cover the effort. Since implementing this pay model in 2017, Dasher retention and overall satisfaction have increased significantly while average delivery times have decreased. […]

The statement comes from this pretty mediocre Fast Company article by Sean Captain, which I find to be very irresponsibly framed in its “let’s treat both sides as equally valid” approach. One side is a $6B+ corporation that holds massive power over the lives of workers and is clearly abusing that power out of a desire for better profit margins; on the other side are the workers themselves, who are not given any semblance of a voice in this article. DoorDash says that 80% of its workers are “happy” with the current system, and so that statistic is presented as a fact, without any caveats questioning whether we should trust DoorDash to speak on behalf of workers in good faith. It’s a disappointing article, written by someone who has a history of writing disappointing articles on tech worker organising. On the other hand, it does have a hilarious postscript: “This article has been updated to correct inacurate [sic] information provided by DoorDash.”

Going back to the statement above: the first thing that stands out is the use of the term “fairly”, in “fairly compensated for every delivery”. It’s a great example of the linguistic appropriation that serves as the building block for all great PR-speak: a word that we usually associate with good things, being used in a context where it’s utterly ripped of all meaning. “Fairly” according to whom, exactly? On whose terms, and in accordance with whose interests? These payment policies are set unilaterally by management, and workers have only a binary choice when it comes to the payment model: accept, or decline and leave the platform in the hopes that you’ll make better money elsewhere. To compensate “fairly”, then, means paying workers just enough that they don’t leave the platform, even if that leaves them in a state of financial precarity simply because other corporations are also taking advantage of workers.

So the degree to which compensation is “fair” is determined entirely by what the market can bear, rather than any ethically-grounded intrinsic notion of fairness. If the market can bear tip theft, then so be it. Paying women less than men is also fair, in that case. It’s an entirely one-sided definition of fairness that foregrounds the interests of the company - i.e., minimising worker pay in order to maximise its profit margins, so that its financials look prettier ahead of its IPO - while completely disregarding the interests of workers. It’s total bullshit, in other words, as is any reporting that presents this reasoning uncritically, in the name of not making a “value judgment”.

The disingenuous use of language continues with the next sentence. DoorDash claims to always pay a “fixed base pay plus 100% of customer tips”. But what is the fixed base pay? For that claim to be true, the “base pay” must be extremely low, lower than the “guaranteed amount” they advertise. And indeed, on DoorDash’s FAQ page, the “base pay” is quoted as $1, with the difference between the base pay and the guaranteed amount being made up via a “boost”, with the boost coming from either the company or from the tip.

It’s really interesting that DoorDash chooses to imply that their goal is to “protect” workers in the next sentence. Remember, DoorDash is the one who controls the entire food delivery app flow, from the payment structure to the option for customers to not leave a tip. But here, the company is trying to play the part of the benevolent protector, sheltering its beloved workers from the vicissitudes of customer tipping behaviour. They seem to want us to blame the customers who don’t tip, rather than the company who 1) set such a low base pay; 2) gave customers, who probably assumed that DoorDash was responsible for paying workers fairly, the option to not tip; and 3) lest we forget, is in this business to make money, not out of charity. They are not protecting workers; they are only protecting their own bottom line.

My favourite part of the statement is the last sentence shown above, which it’s stated that “average delivery times have decreased”, as if that’s a sign of a laudable efficiency improvement rather than an indication that they are making their workers’ lives more stressful. The reason changing the payment structure would lead to a work speed-up is that workers would need to complete more deliveries in order to make enough money to survive, which really means overworking them through threatening their livelihood. If you kidnap a worker’s family and threaten to kill them all unless the worker makes deliveries faster, that would probably have a similar speed-up effect.


So much for the predictably dull statement. The point here is not that DoorDash is lying about its policies - if you read between the lines of the FAQ page, you can sort of see why this tip-thieving behaviour feels in line with their policies. The point is that it’s highly unethical, as it deliberately preys on consumers’ and workers’ cultural expectations around tips in order to divert more money into the company’s coffers. After all, DoorDash could simply charge a higher delivery fee, or take a lower cut, in order to pay their workers more, if their goal were actually to “protect” workers - they don’t have to rely on customers paying more out of generosity in order to actually pay their workers a living wage. But their goal is growth, and profit, and their workers are just so many NPCs, raw numbers in a P&L statement whose only function is to propel DoorDash towards a lucrative IPO.

The recent spotlight on DoorDash and other delivery companies may be due to their policies around tips, but the problem goes way beyond tips. Codified tip theft is merely a symptom of a massive power imbalance in the entire gig economy, between casualised workers and tech startups with billion-dollar valuations. The latter tend to treat the former with a cruel indifference, stemming from the knowledge that they can get away with all but the most flagrant abuse of power. What’s more, they have the nerve to act as if they’re the protectors of these workers. I’ve written about this phenomenon previously in the context of Uber - gig economy companies love to deploy their workers as human shields to deflect criticism, even though they don’t really give a crap about their fate, as long as they can keep recruiting more workers.

What’s especially galling about DoorDash is the way it implicitly blames customers for the way they pay their workers. As if this billion-dollar corporation, which literally creates the app interface mediating every interaction with the platform, is powerless in the face of customers’ desires. As if it’s reasonable to leave something like “paying workers a decent wage for their work” up to the decision of individual customers. Like I said in my post on Instacart from last week, it’s absurd to abdicate responsibility for paying workers “fairly” to the customer, most of whom have no idea how much the worker is already getting from DoorDash; any halfway decent company would build in the costs of doing business into its platform.

What DoorDash is doing, weirdly, is kind of shooting itself in the foot. By exposing the illegitimacy of its very existence, it’s unwittingly undermining the ideological contract that sustains capitalism as a mode of production. As Frédéric Lordon’s says in his 2014 book, Willing Slaves of Capital: Spinoza and Marx on Desire:

Was not capital’s claim to a part of the revenues originally justified by its willingness to assume economic risk, with employees abandoning a part of the added value of their labour in exchange for a fixed remuneration, shielded from the vagaries of the market? (p.57)

The myth of the free market entreats us to believe in the power of corporate competition to price things accurately, leading to the most efficient outcome. If DoorDash is doing well in the food delivery market, then it’s because it’s the most efficient possible facilitator of this arrangement. But that correlation is supposed to go both ways. DoorDash would only deserve its billion-dollar valuation because of the value it’s created through attaining power over a particular market; they wouldn’t deserve it if they were essentially powerless, beholden to the whims of consumers who would stop using the app if their transactions weren’t subsidised through underpaying workers. It’s hard to claim both powerlessness over consumer behaviour - acknowledging that your traction is fragile, and possibly illusory - and also justify a billion-dollar valuation.

DoorDash, however, wants it both ways: they want their critics to know that they are well-meaning but powerless, and they want their investors to know that they will hold nothing back in the ruthless pursuit of profit. Both can’t be true. This latest controversy around their tipping policy is merely the most visible exercise of power, and their decision to keep the policy in place means that the mask is slipping. Their worker-friendly image is crumbling, revealed as nothing more than a facade. Underneath the glitzy exterior is the machinery for an age-old scam, in which capital extracts surplus value from workers who have no choice but to make a living.

If DoorDash truly wanted to serve its workers, it would have to actually include workers in decision-making processes. I’m not just talking about having a worker representative on the board, or surveying workers before implementing a change; those might be slightly better than the status quo, but that’s only because the status quo is so broken. I’m talking about what Callum Cant has termed “platform expropriation” - excising capital from the equation entirely, so that the company is not driven by the need to make people richer, and is instead designed from the ground up to serve workers. The app workflow and logistics network could all be designed to optimise for the experience of the couriers and restaurant workers who make the product possible, while still serving the needs of customers.

It sounds weird even to describe this, because this is so counter to the typical Silicon Valley perspective, where workers are seen as little more than annoying costs to be minimised. But which perspective is more skewed? Wthout its army of underpaid and overworked “Dashers”, DoorDash would be valued at $6+ billion less than it is now.

DoorDash needs its workers, from the couriers who work without healthcare or benefits to the well-paid software engineers who write the code that screws over the couriers. Right now, these workers are artificially divided, and the latter is forced to cause material harm to the latter simply because management has asked them to. It doesn’t have to be that way.

Thanks to Olivia Solon, who inspired this post by sharing that infuriating FastCompany article on Twitter.


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