Where does a tip to an Amazon driver go? Sometimes, toward the driver's base pay
latimes.com
latimes.com
I only wish more workers would realize that it will be better for them collectively to get upset at their employers for not paying them fairly instead of the last customer who stiffed them on the tip.
https://en.wikipedia.org/wiki/Tipped_wage_in_the_United_Stat...
What happened to the "tip is for good service" and the base being covered by the employer for services rendered (e.g. the bottom line of the company)?
That would help but still not be enough, with the US minimum wage.
Now you have two Amazon's. There is absolutely no difference between them. Goods are ten percent pricier in second one, but employees are paid more (they appreciate tips anyway).
Which company would you buy from? Which company would you invest in?
Everyone is responsible here. Problem is, more expensive doesn't necessarily translate to "more ethical".
On the one hand you have society paying for this externality, and on the other you force employers to accurately reflect the market conditions and price that externality in.
Not generally, but probably common in the current political attitude of “reducing the taxes of the rich and taxing the poor.”
It depends on the tax. If the tax is a fixed percentage of wage/income/property, then, at least in general, they affect everyone equally.
However, taxes such as VAT or sales tax, affect the population with less money harder because they make everything, even the basic necessities, more expensive. People that have a substantial chunk of income that they invest/save are hit substantially less by those taxes since they don't intend to spend the investment in the first place.
If your fixed expenses (food, rent, utilities) are 80% of your monthly pay, and the tax reduces everyone's monthly pay by 5%, you're going to have to cut something (cheaper food, small luxuries, or just no longer saving money for emergencies). If you make enough that your cost-of-living is only 50% of your monthly pay, it might dip your savings a little but you'll get through it just fine.
But somehow in the US people are trained not to think in that direction. It's more common to be aware of such possibilities in Europe, or to expect from the system not to completely ruin the life of the poorest.
Do you expect such a restaurant will attract the best talent? I do not.
But there seem to be two equilibria. Opening a restaurant in Paris and telling diners they should tip 20% because you aren't paying the waiters (oh and we left VAT off the menu, another 20%)... even if this were legal, I think you'd have great trouble attracting either customers or waiters.
I think maybe that's the part of the picture into the American tipping situation that Europeans and 1% Silicon Valley workers alike are missing. Most Americans who support tipping do so because they personally know a waiter who knows they make out like a bandit from the scheme. Europeans are less likely to be personally acquainted with an American waiter than your average American, as are wealthy tech workers on the spectrum.
Seems like they’re quite busy: https://www.manhattarestaurant.com/
Rather than everyone becoming a happy, well-paid employee what you actually get is people working via rent-seeking agencies and middle-men - each taking their cut from the same pie.
I am not saying the current system is perfect but legislation needs to allow for some flexibility in the modern workplace.
This is for a combination of reasons:
* The working conditions of Amazon employees (the pickers, the packers, the drivers etc...) is abhorrent IMHO
* The huge (legal but scummy) tax dodges they get away with
* The amount of fake products on Amazon is completely ridiculous
* In relation to the above, the epidemic of fake/paid reviews
* Their packing of some products is laughable, I received a £600 HDD in the same packet they send softback books in. It went Cardboard > Antistatic bag > HDD. Fuck that, I sent it back for a refund without even testing it.
I built a new PC a couple of months back, it was ~£50 cheaper through Amazon than the retailer I ended up buying it from but I'll choose the smaller (yet still known to me) simply because they offer a better service and don't treat their staff abhorrently.
Amazon used to excel at service and quality, now they have most of the market that is gone IMHO.
(Shout out to https://uk.pcpartpicker.com/ for being an awesome tool for PC builders!)
Why would you want to get rid of that?
Maybe I'm deceived into thinking I'm rewarding good performance, but the truth is I'm a chump making a voluntary donation to some billionaire CEO's pay packet.
Why would anyone volunteer to be taken for a fool like that?
Also tipping culture enables companies to do things like this.
However, I disagree that it should be a negative feedback loop. Tipping should be an optional extra that indicates I was extremely happy with my service, not some mechanism for me to extract my revenge on a server who was probably dealing with issues that weren't their fault.
If I need to pay more than the menu indicates, or I am an asshole... yeah, I wanna get rid of that.
Its not neccessary to forbid tipping, but it absolutely should not be part of their regular pay. It should be extra. A tip. Not "oh yeah, you did your job as expected"
If I find myself in a situation where the difference between $20 and $24 for a steak matters for me, I don't go to a restoraunt altogether - or choose a place with a different price range. I think it's more or less assumed that if you've gone to a place (like a bar or a restoraunt) and have glanced through the menu to get it overall price range, then you're comfortable with a ballpark price for a meal, right?
> but it absolutely should not be part of their regular pay. It should be extra. A tip.
That would make it much worse as a signal. (Discussed in another sub-thread).
Now that is a priveleged statement. This certainly isn't the case for people who make less money, like say waiting staff for example.
But this is how you have to regard US menu prices: you add 1/3 or so and have a ballpark figure for what it's going to cost you. Whereas ordering the "menu €15.50" is something you can safely do after checking that you have 15.50 in your pocket.
Tips are stupid because everyone deserves to have at least a minimum wage. If they do a job they should get paid. They shouldn’t be held hostage to people who think they didn’t do their job to the standard of some random person.
Yeah it might be worse as a signal. I've seen a lot of these satisfaction meters lately, where you can press some smileyfaces when you leave the restaurant. If you add the ability to enter a table number you can kinda review your server, after you paid, in private (or at least not with the server giving you a stink eye because you didnt tip)
How much to tip? And to what businesses? If someone leaves out a tip jar at a taco bell, does that mean you have to tip them, and should the amount be different? By how much?
Also, if you don't leave a tip, it doesn't explain what part of the service was unsatisfactory. Was the food bad? The dishes dirty? Did the waitress not refill your coffee quick enough? Or maybe the customer was bigoted against the servers, or just forgot.
that said, I always tip at my favorite takeout places, but not necessarily 20%.
I agree that tips as a substitute for wages should end, and that expectations of non-zero baseline tips should end.
However, I feel that tips as incentives for good service should absolutely continue. (Either that, or real-time rating systems visible to the employer, but I'm not sure that outcome would be preferable.)
That said, I've heard good things about Japan's food service, and they don't require tipping.
EDIT spelling
Jk... somewhat. Robot served food is actually becoming a thing.
In Europe, you get seen when it's your turn and the staff work at a reasonable pace without killing themselves because they have a decent base pay. They don't degrade themselves for tips (I've seen this a lot with waitresses in the US flirting horribly with customers).
There are also significant regional variations in how people interact. And it is more common to stand up & pay on the way out, which solves the frequent American complaint of having to wait forever for the check.
Japanese services (in Japan) in general are truly something to behold.
Even as foreigners we've had entire crews of airline and hotel staff getting involved in resolving minor issues, taxi drivers guiding us to destinations on foot, search parties scrambled to find lost items, and government bureaucrats doing things for us way beyond their job descriptions. It's insane.
The food service is similarly attentive.
And no, I'm not a diplomat, celebrity or anybody special.
We tipped none of them but they all deserved it.
Lots of other industries need face-to-face contact. It would not be a better world if we had to tip the dentist's receptionist, the office building's security guy, the plumber's apprentice who does comes back to finish the job... although it's still important that all of these behave well.
And no, re-defining 'tip' to mean whatever Amazon wants it to mean somewhere in the Terms of Service fine print does not absolve them.
I’m not saying that’s just. Companies abuse service workers, and use some legalistic convention to do so.
Would you go suing basically every restaurant for fraud though? Justice here really means legislating the wages and tips laws to be more generous to workers.
In other states/countries, this practice is highly illegal.
Yes, they do get a base pay that gets eaten away by tips until the tips exceed the base pay. It's structured like so:
1. The state minimum wage is, say, $8.
2. The state minimum wage for tipped workers is much lower, say $2.
3. But the minimum wage for tipped workers doesn't exempt you, the employer, from paying the overall minimum wage. If someone is so terrible at their job that they only make $1 / hour in tips, then you have to pay them $7 / hour so they end up making minimum wage.
But you can describe the exact same pay schedule differently:
1. The minimum wage is $8 / hour, and that's what waiters make.
2. But for tipped workers, up to $6 / hour of tips can be garnished by the employer.
As you can see, your first $6 / hour of tips do nothing but reduce your base pay. Whatever you get tipped above that amount is yours to keep.
You had it right the first time, but the first $6/hour of tips do not reduce your base pay, and are not considered garnishments since you are guaranteed a minimum no matter what. (And "garnish" does have a legal meaning in this context so that's definitely the wrong word to use here.)
It should be contextualized another way: the first $6/hour of tips offset the make-good wages the restaurant would have to pay if you hadn't earned those tips.
Except for the joy of financial engineering, there is no difference between "you make $8 / hour, and the first $6 / hour of your tips go to me instead of you" and "you make $8 / hour, and whatever tips you get are yours to keep, but the first $6 / hour of your tips lower your base wage by an equal amount".
But you must conceive of it as either garnishing tips or eating into the base pay, because if you work one hour and get tipped $20, you only earn $22. If your tips weren't being garnished and also didn't reduce your base pay, you'd earn $28.
Tipped workers have a lower minimum wage. The standard minimum wage is relevant only if they don't reach that with tips. It's a fallback that was added to the law to protect the rare servers who don't make at least minimum wage from their tipped income. It's the exception, not the norm.
- Make up a scenario.
- See who gets how much money.
- Ask yourself what I would predict.
- Then, and only then, tell me I'm misunderstanding something. And then tell me what it is.
Very few wait staff are in the range where the tips affect how much their employer pays, and they're definitely not supposed to be in that range. The base pay is not $8, because almost nobody has to be brought up to that. The base pay is $2, and none of that gets removed.
That's not the case with most of these delivery companies. They have smaller numbers of tips and they're not a tip-based income. The base pay really is the bigger number, and the companies are subtracting from it.
Or in short: You have the math right but your definition of "base pay" is wonky.
Do they really though? The employer must guarantee that they earn the standard minimum wage, regardless of what happens with tips, so effectively their minimum wage is the same as everyone else's and all this stuff about "base pay" is a wordplay shell game.
Either way, what's effectively happening is the customer is subsidizing somebody who their employer would otherwise have to pay, so it all amounts to the same thing: your tips up to a certain level are going to the employer, not the employee.
Going to repeat this again, for emphasis: tipped workers have always had lower base wages than non-tipped workers. The make-good requirement is a late addition to labor law that very rarely applies. The make-good requirement applies so rarely that a server who doesn't make at least standard minimum wage after tips will likely be let go for basic incompetence.
Certainly this isn’t the expectation of consumers of these delivery apps that it might work that way. It even says in pretty much all of them “100% of the tip goes to the driver,” further setting up the expectation that this is in addition to base pay... not subsidizing it.
Either we need cultural and policy acceptance of the Instacart/Amazon model of subsidizing pay, or they need to change their behavior (which feels far more fair given the employer size). It’s not like the majority of delivery apps are mom & pop — they’re billion-dollar corporations or multi-million dollar startups backed by big VC money. Cutting costs on the backs of your dynamic and more economically vulnerable labor force feels cheap and immoral.
I guess apparently Amazon, DoorDash, and Instacart do!
> 100% of the tip goes to the driver.
That's verbatim what happened! They just omitted the additional fact that they would decrease the base pay, like in the food industry.
> Cutting costs on the backs of your dynamic and more economically vulnerable labor force feels cheap and immoral.
Sure is! But restaurants do that too!
The difference is, a rich, single, 35+ year old male programmer can be righteous about Instacart. I mean, they don't cook for themselves, they don't tip their Amazon drivers (they didn't know you can do that!), they eat out, so who cares if the tips are taken away.
But virtue taking away your right to pay $50 for a dinner-for-one at Burma Love? Fuck that, they say. They're hungry.
I call BS. Money is fungible, so "of the $10 we gave the driver, $5 was from you and $5 was from us" doesn't mean anything outside of the stories we tell. All that happened in terms of bank transactions was that you gave Amazon $5, and Amazon gave the driver $10.
That said, there is a good way to tell whether they're getting your tip or not. Ask how much more money the specific driver you tipped received than if you hadn't tipped. That's right, $0.
(On the other hand, I bet if you tipped more than the base pay, the driver would get that much. So big enough tips probably make a difference.)
Though what really matters is what the courts say :-).
Those restaurants are not advertising minimum wage + tips, or even just minimum wage. They're advertising $4 + tips. Amazon should similarly advertise whatever it's guaranteed to pay itself + tips. Then it's transparent and there's no confusion.
So while this practice is scummy, it's basically just speeding up what would happen normally.
And while pre-Internet delivery was previously understood to be only tips (e.g. in NYC, the person delivering your Chinese food is paid solely by your tips, not by the restaurant, effectively just like a waiter)...
...we haven't societally established what the right expectation is for dot-com delivery people. Because it's such a new thing, most consumers probably assume they're paid a fair wage and tips are either a non-required bonus (like Uber) or a required bonus (like hairdressers). Yet the companies seem to be treating tips as the entire salary (like waiters, bartenders, and restaurant deliveries).
Of course there's zero logic to any of this, only custom. And the insane confusion around it is just another argument for getting rid of the damned practice of tipping in the first place, everywhere.
Call it “wage subsidy” and see how many people leave anything.
I mean, "mandatory"-ish tips have been legal "wage subsidies" for a very, very long time yet are still called "tips."
https://www.chicagotribune.com/news/opinion/commentary/ct-pe...
>The origins of tipping go back more than a century, to the days when only well-heeled Americans dined out and waitstaff constituted a tiny fraction of the nation's labor force. Government left the custom alone, even though — or perhaps because — it reinforced the hierarchy between mostly white, male restaurant customers and their servers, often women and minorities. Even New Deal-era minimum wage laws exempted tipped workers until 1966. By then, tipping was so culturally embedded that Congress took it for granted that certain workers "customarily and regularly" received tips, while others did not. It created the "tip credit" system, whereby restaurants could pay customarily and regularly tipped personnel a much smaller minimum wage than others received, as long as tips offset the difference.... The June 19 ballot initiative in Washington would gradually replace the "tip credit" with a system under which all local restaurant employees would get the statutory minimum wage — soon to be $15 per hour — and servers could still receive tips on top of that. Similar laws prevail in seven states, mostly on the West Coast. However, servers wouldn't necessarily get to keep all of the tips, because the law Congress just passed lets restaurants that pay servers the statutory minimum and don't use the "tip credit" redistribute tips to their back-of-the-house employees.
Sounds not so straightforward to me.
(That's before we get into tip pooling, which is an extremely common practice.)
Sounds weird. It used to be a big faux pas to have non-male non-white waiters and still is sometimes in some kind of restaurants.
Restaurants are basically a 200 year-old technology, but rich people dining well when visiting each others' country houses goes back a lot further. And I believe it was the custom that, on departing, a visitor would tip the host's servants. It's my impression that this is where the custom came from (but not an expert opinion).
I don't like the idea of people working for my benefit earning starvation wages.
(In my area servers and kitchen staff now make the same standard minimum wage before tips, so it's especially obscene to demand 20% on top of the $12-$15/hour the server is already making for almost no work.)
In practice that means most items will costs 20% more than today, salaries for the waiters/waitresses are 20% higher than today, and customers are not expected to tip.
I think you should actually try to get to know some of the people who do far more valuable work than taking orders and occasionally delivering plates to a table and who make less than waitresses, like social workers, janitors, and bus drivers. If you know enough of those people, you begin to question the entire moral justification for tipping waitresses or serving staff in the first place.
Friends I had in high school would make 2-3x minimum wage as bussers on busy nights. $2-3 per server per shift was pro forma, even on a quiet night.
People say you're supposed to tip based on "quality of service" (whatever that means?) and tips are an incentive to provide "good service"[1] (because obviously everyone who isn't tipped doesn't do their job?????)
However, in practice if your server is an asshole and you don't tip you also stiff the host and bussers and bartenders. That's obviously profoundly unfair.
Not to mention if you get bad service it's unlikely that it's your server's personal fault, restaurant service is a team effort and the quality of service is mostly a function of quality of management.
[1] I don't see a functional difference between this and bribery.
Tipping culture (alongside mass homelessness in some places) feels very awkward to me when I'm in America - I never know who I'm meant to tip, and a few times when I havn't offered one people have been really aggressive about it.
Amazon should be upfront - clearly declare that the minimal wage is taken from your tips. Declare this right in the employment contract and call it a wage subsidy. The fact that they are hiding this and not responding to enquiries shows that they are operating in a malicious and dishonest manner. This is injustice to the driver and Amazon should be prosecuted.
Should be obvious: So that unscrupulous places don't fill in their own tip amount.
* Server brings bill, disappears to go serve others
* Patron places credit card in the sleeve thing the bill came in, leaves it on the table, waits. (Maybe is still finishing a drink or dessert at this point.)
* Server picks it up at some point, takes it to a register, swipes it (not in view of the patron). There is no entering of a PIN, because U.S. credit cards do not require a PIN.
* Server brings receipt back to patron. There are at least two copies: "Merchant copy" and "customer copy". Each has two blank lines: One that says "Tip", and one that says "Total". Often a range of "suggested" tips is provided below. The "Merchant copy" also has a line for a signature.
* Patron fills out "Merchant copy" with their desired tip, and does the math to fill out the total. Signs the signature line. Takes "Customer copy" with them, leaves "Merchant copy" in the sleeve, and exits the restaurant.
* Server takes "Merchant copy" and puts it in the stack designated for such things.
* At some point that day, a restaurant employee goes through the stack of "Merchant copy" receipts and enters the tip amounts for each one into the register.
It's an insane system that beggars belief for people who aren't aware of it. But this is how it works at probably more than 95% of "sit-down restaurants" I've eaten at in the U.S.
My main problem with this is that all the hard work is typically done by people you don't interact with, which in a restaurant would be the people cleaning the place, cooking the food, doing the dishes, etc. Basically, people working double/triple jobs because of the before mentioned minimum wage issues. So, I tip and I hope some of that trickles down to those people as well. But I would not be surprised to learn that most of that money never ends up where it belongs.
In the US, basically you get your ass kissed in a blatantly indifferent and disingenuous way by eager waiters desperate to ensure you tip generously for the service of delivering food from the kitchen to your table. It makes the whole experience of being in a restaurant a lot less pleasant. There's also this pressure to basically leave ASAP so the waiter can start harassing the next customer. So they say, "is everything alright" but what they mean is "hurry up so I can maximize my tip/hour ratio". There's just something deeply unpleasant about that.
Is this an American thing? (part of this 'strange' American tipping culture)
Definitely not, I've never heard of it. The closest I've ever heard of this is writing a christmas card for your mailman once a year.
We can argue all day long about whether this 'culture' should exist or not, the fact is it does exist and there are many situations where the most ethical choice is offer some kind of tip (and cash is most certainly appreciated by those in the know). Yeah, it's archaic and overcomplicated and regressive, much like just about everything else involving human interaction.
If you don't like it, abolish the practice in businesses where you can influence such policies. Feel free to withhold tips if you want, in lots of cases the workers you interact will hardly notice because plenty of others do the same. Just know that if you ask a low-wage worker to put up with extra hassle for you and don't offer extra compensation in return, in many cases you will be viewed as clueless and/or selfish. That's just how it is, respond to the reality as you see fit.