Uber, DoorDash to make tipping harder for NYC customers
According to Bloomberg report, Uber Eats (UBER) and DoorDash (DASH) have made changes to their respective apps to make it more difficult to tip drivers after a NYC wage law went into effect on December 4th. The new base rate is $17.96 an hour for the drivers, who are saying the tipping change could cause them to earn less in the long run. Yahoo Finance Anchors Julie Hyman and Josh Lipton break down the latest from this development and what it could mean for the companies and workers going forward.
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Video Transcript
JOSH LIPTON: Uber and DoorDash, they are reportedly making tipping deliveries harder after NYC wage law goes into effect. So I don't know-- listen, we're both Jersey. So it'd be interesting how this kind of affects both customers and those doing the work for these two services.
JULIE HYMAN: So it sounds like, this has to do with when you were prompted to tip, right? So now the base pay for delivery workers, they have to get at least $17.96 an hour. This already went to effect on December 4th. The change now is that Uber and DoorDash have said, we can't pass this all on to our customers. So the way it works-- worked before the drivers would be able to see what you were potentially going to tip and choose based on that, which doesn't seem great from a customer perspective, in my opinion, because then you're paying to get that service. I don't know.
So now they've taken that away. But now the risk is that these folks are not going to make as much. The other thing is it sounds like these delivery services are not going to hire as many people. So they'll be maybe less work to go around. It's unclear exactly how that's going to play out. But this seems to be the concern.
JOSH LIPTON: When you're in New York, Is it Uber or Lyft for you?
JULIE HYMAN: Is it--
JOSH LIPTON: Do you have any loyalty or you just toggle?
JULIE HYMAN: No, I have no loyalty.
JOSH LIPTON: Really just toggle.
JULIE HYMAN: I have no loyalty. They both cancel, like, unexpectedly, they both-- I mean--
JOSH LIPTON: They're also not much cheaper than a taxi. Now, that could be-- I'm assuming fees and taxes.
JULIE HYMAN: Right. Well, but this has more to do with the food delivery than it does the actual-- at least, this particular aspect of it. But I'm sure there are knock-on effects. I mean, that's always the argument against raising the minimum wage is there are knock-on effects. But I think we'll need a little time to see how it actually plays out.
