- Delivery apps are changing up tipping and service fees for NYC customers.
- Minimum wage for app-based NYC drivers was recently raised to about $18 per hour.
People who used DoorDash or Uber Eats in New York City this week got a surprise message when they tried to order lunch or dinner — no more tipping at checkout.
They also might have noticed a new fee tucked into their final bill that made it more expensive.
So why the change? It's because the delivery apps companies aren't happy about new minimum wage rules in New York City — which DoorDash, Uber Eats, and others tried and failed to stop from going into effect — that require drivers to be paid a minimum of $17.96 an hour. Before the rules, delivery drivers were earning about $7 per hour on average without tips.
In response, NYC residents ordering on DoorDash and Uber Eats can only tip their delivery driver after their order has been picked up or completed.
The changes come amid a wider cultural debate about tipping etiquette as fewer Americans are tipping in general while an increasing number of services are asking for a gratuity — including self-service scanners at grocery stores.
The delivery apps are saying they have little choice but to pass on the extra costs of the new minimum wage structure onto customers.
"These new regulations will force us to raise fees for orders in New York City," DoorDash said. "In order to better balance the impact of these new costs, we're moving the option to tip in the DoorDash app to after checkout."
DoorDash and Uber Eats driver say their drivers are now paid $29.93 per "active" hour for getting your McDonald's order to you — but only for the time spent picking up and delivering the food. Your delivery driver isn't paid for the time they spend waiting for new orders to fulfill. DoorDash said it did the math and landed on the $29.93 per active hour figure to ensure it hit the new pay minimum required by the city.
Like DoorDash, Uber Eats also is axing upfront tipping.
"Additionally, tipping will now only be available after your order has been delivered," Uber Eats said in the email to customers. "As always tipping is optional and intended to thank your courier for exceptional service."
When asked why they are making consumers pay for the additional costs to pay couriers, an Uber Eats spokesperson told Business Insider: "No one should be surprised — the city's own study made clear that companies would likely eliminate jobs, discourage tipping, and force couriers to go faster while doing more deliveries."
However, NYC's Consumer and Worker Protection Department (DCWP) pushed back on that characterization in a statement.
"This is entirely Uber and DoorDash's own business decision," a spokesperson told BI. "DCWP supports customer's having the option to tip whatever amount they would like, and we do not endorse this nor have we suggested the apps change their tipping policy."
Say hello to the extra NYC 'Courier Fee'
You'll also be paying more for your next order if you live in New York City, according to DoorDash, which is adding new service fees.
"These new regulations will force us to raise fees for orders in New York City," the company said.
Uber Eats sent out an email to its New York customers, letting them know that they are adding a new fee "to help offset the costs to pay couriers." The fee for an order worth about $30, according to research by Business Insider, is $2.
Tipping at checkout used to be heavily encouraged
DoorDash has made other tipping changes this year that seemed to emphasize the importance of at least considering tipping your delivery driver.
In June, DoorDash started sending tip "nudges" to customers, reminding them that they could increase tips for 30 days after a delivery. In November, the company warned customers that no-tip orders might result in slower food deliveries.
Driver advocate Sergio Avedian said DoorDash is giving consumers mixed messages when it comes to tipping.
"A few weeks ago DoorDash was telling consumers in other states that if they did not tip, their food may not be delivered," said Avedian, a multi-app gig driver who shares his best practices on The Rideshare Guy. "Now they are discouraging tipping in order to supposedly keep the costs down on the consumer?"
Delivery drivers interviewed by Business Insider this year consistently complained that their base pay had been slashed since the pandemic, when orders surged and apps provided lucrative delivery incentives.
Customers also tipped better during the pandemic, drivers have said. More recently, some have admitted to declining orders with low tips in favor of higher-paying ones.
Yet, DoorDash previously maintained that Dashers were earning more today than ever before. With tips and base pay, Dashers in the US on average make $25 an hour on active deliveries, DoorDash previously told Business Insider.
The wage bump for delivery drivers in New York City comes as DoorDash has yet to turn a profit even as delivery orders continue to surge.
But moving forward, it appears New York City-based customers will have to go out of their way to tip their driver — and it'll be easier than ever to forget to entirely.
Are you a NYC-based delivery driver or have a story to share about the recent changes? Contact Jordan Hart via email (jhart@insider.com). Check out Insider's source guide for other tips on sharing information securely.