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DoorDash, an on-demand food delivery company, caused an uproar after it became known that it had a policy that put customers’ tips for delivery workers into its own pockets. In a series of tweets on Tuesday night, DoorDash CEO Tony Xu said he would change course.
“We’re changing our model,” Xu tweeted. “The new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order.”
The company has 400,000 delivery workers, which it calls “Dashers.” The change in policy comes after a slew of customer complaints called out DoorDash for reportedly tricking them into believing their tips were going to the delivery workers. While the controversial policy has been in place since 2017, it wasn’t until articles were published in The New York Times and NBC News that the uproar began.
The on-demand economy, which includes delivery companies like DoorDash, Instacart, Postmates and Grubhub and ride-hailing companies like Uber and Lyft, has been under fire over the past few years for not doing enough to protect workers. Lawsuits have been filed against Instacart and Uber over their tipping policies. And several other suits have been brought over the companies’ classification of their workers as independent contractors, rather than employees. Under the contractor classification, workers typically aren’t entitled to protections like sick days, Social Security and health care.
In his tweets, Xu said the idea of DoorDash’s tipping policy was for the company to guarantee its delivery workers a base rate for each delivered item. When customers’ tipped through the app, that money would go to the guarantee instead of being tacked on top of their pay. Instacart used to have a similar tipping policy, but changed it in February.
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“It’s clear from recent feedback that we didn’t strike the right balance,” Xu tweeted. “We thought we were doing the right thing by making Dashers whole when a customer left no tip. What we missed was that some customers who *did* tip would feel like their tip did not matter.”
While Xu said DoorDash is changing its model, he didn’t provide specific details on what it’ll look like going forward. He didn’t say whether or not DoorDash would still guarantee delivery workers that base rate.
The company didn’t respond to request for comment.
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