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What DoorDash pays, after expenses, and what’s happening with tips

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Re: What DoorDash pays, after expenses, and what’s happening with tips

#261

Post by noelwelsh »

eru wrote: post #241
mjevans wrote: post #173

Earlier quoted context omitted.

Can we please do that for all jobs? I want the workers at places I get food and such from to actually just have good base pay. Tips should be about rewarding going BEYOND the normal... not as a basis of someone's wage.

> Tips should be about rewarding going BEYOND the normal... not as a basis of someone's wage. For game theoretic reasons / general equilibrium, you can't restrict tips like that. Even if you try. Your shop can ban tips, though.

This is absolute nonsense, as evidenced by countries where this is not the case (e.g. all of Europe AFAIK). Furthermore, if you have a point to make this comment does not do it. It's just some vague handwaving with fancy words.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#262

Post by onion2k »

sokoloff wrote: post #256
onion2k wrote: post #212

Earlier quoted context omitted.

It'd be much more efficient for DoorDash to work out when a job isn't viable for the driver and either increase the price or refuse to take it.

Turning paying customers away for what is (to them) arbitrary and unpredictable reasons is a recipe for your service being perceived as unreliable. “I’m hungry; I’d like to give Doordash some money.” “Computer says no.” “Damn; can’t trust Doordash.”

This is a fairly simple problem to manage though. The computer shouldn't say "no", it should say "This trip isn't fair on our drivers because the standard fee doesn't cover the costs. Would you like to pay the extended distance fee or cancel this job?" It'd still put some people off, but fewer than you'd think. A lot of people want to be ethical when they're buying things.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#263

Post by ajcodez »

I can see why they did it that way. Fixing the algorithm would require setting the base pay relative to delivery cost and then canceling orders that don’t tip enough to get accepted. Not exactly palatable for customers. ”Your order was not accepted by any drivers. Try again!”

Re: What DoorDash pays, after expenses, and what’s happening with tips

#264

Post by eru »

Majestic121 wrote: post #254
eru wrote: post #241

Earlier quoted context omitted.

> Tips should be about rewarding going BEYOND the normal... not as a basis of someone's wage. For game theoretic reasons / general equilibrium, you can't restrict tips like that. Even if you try. Your shop can ban tips, though.

Yes you can, it works pretty well in a lot of places in the world.

I guess I should have been a bit more clear.

When customers tip, and total wages in the tipped jobs are thus higher than in the non-tipped alternatives, workers will change jobs until expected total wages are about equal.

What works in other countries, eg Japan or Australia, is that different social norms lead to much less total tipping. But you can't transform eg American into Japan or Australia at a whim.

It's up to customers to make tipping the exception and not the norm. But that's hard: because the individual tip goes directly to that starving poor devil who served you and has a relatively big impact on their life, but only a very small impact on workers' expectations when changing jobs, there's a 'tragedy of the commons' going on: each individual tip you give provides you with a nice warm fuzzy feeling of altruism, but it damages your total goal of having decent base pay.

So, it's very hard for individual customers to change that. But: individual employers can drive change. They can forbid tips and prominently display that they do so, so that both prospective workers and customers now what they are in for.

Prospective workers will demand higher base pay. Customers will take the lack of tip into account when comparing prices.

A Google search for 'restaurant bans tips' shows a lot of write-ups about experiments. It's not a panacea, of course.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#265

Post by eru »

franga2000 wrote: post #199
2rsf wrote: post #192

Earlier quoted context omitted.

Yes we can, that's how it works in Sweden and AFAIK in many other European countries. Tips are not expected, and are meant only for extraordinary service. The base pay is decent and so are the benefits like vacation, pension etc.

Is there any other country other than the US where paying service workers below minimum wage is legal or acceptable? I've been around a fair bit of Europe and surroundings and I've never encountered the US system.

Germany didn't even have a minimum wage until fairly recently. The Scandinavian countries don't have a minimum wage either, see eg https://www.theguardian.com/world/2020/jan/12/nordic-countri... Neither does Switzerland.

What's with the American obsession with outlawing poor people's jobs?

(My adopted home country, one of the richest places in the world and one of the best places to live, doesn't have a minimum wage either.)

Re: What DoorDash pays, after expenses, and what’s happening with tips

#266

Post by eru »

noelwelsh wrote: post #261
eru wrote: post #241

Earlier quoted context omitted.

> Tips should be about rewarding going BEYOND the normal... not as a basis of someone's wage. For game theoretic reasons / general equilibrium, you can't restrict tips like that. Even if you try. Your shop can ban tips, though.

This is absolute nonsense, as evidenced by countries where this is not the case (e.g. all of Europe AFAIK). Furthermore, if you have a point to make this comment does not do it. It's just some vague handwaving with fancy words.

See https://news.ycombinator.com/item?id=22073217

Re: What DoorDash pays, after expenses, and what’s happening with tips

#267

Post by Drakar1903 »

sschueller wrote: post #207
dmode wrote: post #160

Why can’t we have normal businesses where you employ your workers and charge your customers the real cost of the transaction ? If that is not viable, don’t start the business to begin with. Let’s just go back to first principles, can we ?

We can, stop using and supporting these predatory companies. Never use Uber, Lyft, Doordash, Uber Eats, AirBnB etc. No exception irregardless how easy or cheap it may be. It's a small sacrifice but can and will make a difference. Using these services to me is like asking a waiter to pay for part of my meal. When it comes around to paying the bill are you able to face someone and ask them to pay for part of what they…

You could book an Uber to two streets away and tell the driver that you actually want to go to somewhere else, and you'll pay the guy under the table. Bet they won't mind that.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#268

Post by whatitdobooboo »

Some valid points maybe but the article is a little misleading, bolding the $1.45 but then right after saying "after mileage and expenses."

Not sure what a company like doordash can do in that case, are all doordash drivers driving fuel efficient cars?

Also, what factors in is that many people cannot afford cars that are in good shape.

Tips aspect is inexcusable, however.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#269

Post by Drakar1903 »

PanosJee wrote: post #235
arcticbull wrote: post #163

Earlier quoted context omitted.

I mean the idea is that you operate at a loss until the economies of scale catch up and you begin being profitable. Starting with the low price let’s you maximize growth, and you make it up on the back end. That’s not a problematic system. What is problematic is if there are no economies of scale.

Economy of scale applies to production think chips & screens. What economy of scale can DoorDash achieve? Persuade everyone to be paid below fair wage? Push the margin of restaurants down?

I see a kind of future where restaurants are reduced to a kitchen and packing area, with no seats. Then several kitchens bunched together to save on rent and utilities. Then cut out the drivers with air or land based drones. Then start lobbying so that the drones can move underground, and new buildings have to include a drone delivery vent / conveyor belt.

You already can live your whole life and never leave a house, working remote or playing the stock market, having everything delivered. It's grim. And it's coming.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#270

Post by Angostura »

eru wrote: post #265
franga2000 wrote: post #199

Earlier quoted context omitted.

Is there any other country other than the US where paying service workers below minimum wage is legal or acceptable? I've been around a fair bit of Europe and surroundings and I've never encountered the US system.

Germany didn't even have a minimum wage until fairly recently. The Scandinavian countries don't have a minimum wage either, see eg https://www.theguardian.com/world/2020/jan/12/nordic-countri... Neither does Switzerland. What's with the American obsession with outlawing poor people's jobs? (My adopted home country, one of the richest places in the world and one of the best places to live, doesn't have a minimum wage…

> What's with the American obsession with outlawing poor people's jobs?

Because other countries haven't institutionalised the idea of poverty-line wages.

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