Changes to the DoorDash and Uber Eats apps have cost food delivery workers in New York City millions of dollars in tips, according to a new report from a city agency.
The New York City Department of Consumer and Worker Protection (DCWP) claims the companies made design changes to their apps that made it harder for customers to tip delivery workers after the city began enforcing a minimum pay rate in December 2023.
According to the report, average tips for both apps fell to $0.93 per delivery from $3.66 within a week of the new designs rolling out. That decline has continued. The current average tip on those apps now sits at $0.76 per delivery, resulting in an estimated $554 million loss in tip income for delivery workers. The agency says that translates to roughly $5,800 in lost annual income per worker.
For context, the current average for other food delivery apps is $2.17, according to the report.
“Under Mayor Mamdani, the biggest corporations in the world will no longer be able to rake in record profits on the backs of workers and consumers,” said DCWP Commissioner Samuel A.A. Levine in a press release.
The city agency claims Uber Eats and DoorDash moved tipping prompts to after checkout, forcing customers to navigate a separate, “easy-to-miss” process.
“DCWP’s claims, and the subsequent reporting, are flat out wrong. To be clear: no money has been stolen from Dashers. Consumers have not been misled. Dashers always receive 100% of tips placed on DoorDash,” said DoorDash Head of North America Public Policy John Horton in a statement emailed to Gizmodo.
DoorDash has also launched a webpage pushing back on the report’s findings.
“Moving tipping to after checkout isn’t novel or nefarious – it’s how tipping works in many areas of life. In fact, the DCWP suggested this exact approach in their 2022 study. We followed that suggestion and now they are attacking us for it,” Horton said, referring to a separate report the agency published while former Mayor Eric Adams was in office that examined how a minimum pay rate could affect delivery apps.
That report said that higher pay for workers could give delivery platforms the option to “reduce consumers’ costs through changes to the user interface that discourage or eliminate tipping.”
Uber Eats did not immediately respond to requests for comment.
The new report landed just days before DCWP plans to begin enforcing new amendments to the city’s delivery worker laws. The changes require food delivery apps to give New York City customers clear, user-friendly options to tip delivery workers.
DoorDash and Uber Eats sued the city last month in an attempt to block those amendments from taking effect. The court has not yet issued a ruling, meaning the department plans to move forward and enforce the law starting Jan. 26.
“If these companies do not follow new tipping laws going into effect later this month, they will face significant consequences,” Levine said.
This isn’t the first time DoorDash has been under fire in New York over worker pay.
Early last year, the New York State Attorney General’s office announced a $16.75 million settlement with DoorDash after finding that the company had allegedly misled both customers and delivery workers about how tips were handled.
The AG’s investigation centered on DoorDash’s “guaranteed pay” model, used between May 2017 and September 2019. Under that model, workers were shown how much they would earn for an order before they accepted it, but customer tips were used to cover the guaranteed amount, rather than add to it.
