Uber, DoorDash Caused $5,800 Annual Tip Loss For Delivery Workers With Interface Design Changes In New York, Says City Report

• These tricks make it harder for consumers to tip delivery workers, as a result of which tips for UberEats and DoorDash delivery workers fell by more than $550 million, the report said.
• Tips on rival platforms that kept their interfaces unchanged remained steady, it added. 
• New York’s new tipping laws will go into effect later this month.

A report from the New York City Department of Consumer and Worker Protection (DCWP) on Tuesday said Uber Technologies and DoorDash designed their interfaces to ensure delivery workers earn less.

The report noted that UberEats and DoorDash engineered “design tricks” in their interfaces after the city established a minimum pay rate for workers in 2023.

These tricks make it harder for consumers to tip delivery workers, as a result of which tips for UberEats and DoorDash delivery workers fell by more than $550 million, the report said. Tips on rival platforms that kept their interfaces unchanged remained steady, it added.

Shares of Uber Technologies and DoorDash rallied 1% higher on Tuesday afternoon.

How Much Do Delivery People Make In Tips?

As per the report, the average tip at Uber Eats and DoorDash is currently $0.76 per delivery, compared to $2.17 per delivery on Restaurant Delivery Apps that offer a tipping option at checkout. The design change has led to a loss to workers of approximately $5,800 per year, it added.

“With a new law protecting tips coming this year, DCWP is committed to ensuring workers earn the pay they deserve and consumers are restored the option to tip without barriers,” the department said.

DCWP Commissioner Samuel A.A. Levine also noted that companies that do not follow the new tipping laws slated to go into effect later this month will face “significant consequences.”

Last month, the New York Times reported that Uber and DoorDash made efforts to overturn new New York tipping laws by filing a joint federal lawsuit in the Southern District of New York. The new laws will require the apps to suggest a minimum tip of 10 percent at checkout, though customers can contribute nothing at all.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around DASH and UBER trended in the ‘bearish’ territory at the time of writing while message volume remained at ‘normal’ levels.

DASH has gained 29% over the past 12 months while UBER added 30%.

Read More: Travere Therapeutics Stock Slumps After FDA Extends Drug Review Timeline To April: Retail Is Divided On Eventual Approval

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