Are you a Grubhub driver in California? If so, you may have noticed a dramatic drop in tips recently. Senior RSG contributor Paula Gibbins investigated why – and why drivers are so upset about it.
Grubhub drivers in California are starting to notice a decline in tips. Recently, it was revealed why.
It appears that Grubhub has changed the way they display suggested tips within its consumer app. Instead of a percentage, such as 15% or 20%, they are shown a dollar amount where the top suggested amount is no more than $1.50.
Update: Grubhub Returns to Original Tip Display
On January 6, drivers on Reddit shared screenshots of Grubhub returning to the original tip display screen (percentages, not dollar amounts). This is great news!
Some drivers noted they still haven’t received the update (return to original tip options), so if you haven’t seen it yet, make sure to download any new updates to your app or phone.
Grubhub Blames Prop 22
Customers have also noticed that there’s an added fee on their orders. The explanation given within the app is this:
“In support of California’s Prop 22, this payment helps guarantee minimum wage and healthcare benefits for our drivers so they don’t have to depend on tips.”
The fee is simply called “Driver benefits”. On top of that, at the bottom of the screen where a customer is typically encouraged to leave a tip, they are greeted with the message “Leave an optional tip on top of Driver benefits.”
This almost sounds like Grubhub is replacing driver tips with this “Driver benefit” fee that is not optional and discourages customers from actually leaving a tip. It sounds like they are just trying to get around paying for the driver benefits themselves.
In the old system, the customer was given a range of percentages from 20% up to 30% to choose from, all of which are higher than $1.50 in the new system.
Typically, customers will base their tips on what is suggested. If they want to go lower, they will, but will rarely go higher if that option is not directly in front of them.
As you see in the example above, with the old system, this driver could have gotten a $4.35 tip versus the $1.50 of the new system. It was also not labeled as “optional” to tip your driver previously.
Instead, it had the simple wording “Add a tip for your driver”. Nothing about optional and nothing about “on top of X fee”.
Understandably, drivers took to the internet to vent their frustrations at the change.
One person on Reddit stated: “It is certainly an interesting middle finger to their drivers. For this to have gone live, it means somebody with the authority to force it through or stop it made it happen despite doubtless many people telling them this was going to backfire.”
Some are not so certain it’s a way of slapping drivers across the face. This poster on Reddit gave Grubhub the benefit of the doubt:
“Yes, it could be the case that they are intentionally disrespecting their drivers.
BUT, it could also be the case that whoever was responsible for this is so far removed from the general sentiment of drivers that they actually thought it was a good idea and that it would help drivers in some way.
I’d rather give them the benefit of doubt and try to understand why they did this because I’m certainly no insider.”
But, they quickly backpedaled when someone pointed out: “I don’t think anyone put $0.50 as a tip option with good intentions.”
That thread goes on for over 100 comments, mostly with the sentiment that Grubhub is doing a huge disservice to their drivers, most especially the week before Christmas. In many instances, it’s pushing drivers to drop Grubhub and go work for competitors, such as DoorDash.
On a similar thread, this driver said, “Haven’t gotten higher than 1.50 tip in the last 3 days.”
To be clear, $1.50 is not the max allowed on the app at the moment, but it is the highest option shown on the tipping screen.
A customer posted, “Grubhub’s max suggestion on tips is $1.50. You can customize but most people are lazy and with Grubhub’s wording, they are strongly influencing the $1.50 max. I ordered and just tipped cash for the first time because of this.”
More Changes Are Coming Than Just Tips
Of course, with the passing of Prop 22, other changes have been happening as well. One of them is what a driver needs to do to qualify for the “healthcare stipend” that was promised with the passing of Prop 22.
This screenshot shared on Reddit shows: “To qualify for healthcare subsidies, you must average at least 15hrs of active delivery time per week over the course of the quarter.”
It is what was promised in the proposition. Apps such as Uber and Lyft have stated that their definition of “active time” for this qualification means once you accept a trip until the completion of the trip.
On Grubhub, it states, “Active delivery time is the period of time from when a driver accepts an offer to when the driver completes the order, or to the time when the order is canceled by the customer or restaurant.”
It also stipulates, “You will not be paid for active delivery time if you abandon or choose not to complete the delivery after you have accepted the offer, or if other fraud is detected by Grubhub.”
Unfortunately for drivers, this doesn’t make clear what would happen if you’re unable to complete an order because no one answers the door or other instances where it’s impossible to complete the delivery.
Not Just Grubhub
While this specific change to tipping is unique to only Grubhub at the moment, other apps are making changes in light of Prop 22 passing in California.
For instance, Lyft drivers are noticing a large decrease—and in some cases a disappearance—in streaks and bonuses in California. A post on Reddit explains, “So I was getting an insane amount of streaks for Sept, Oct and half of November (like 5-10 a day, 3 ride $13 15 or 18). Drove a bunch, did streaks, 750 rides always 5 star and then bam… Nothing.”
Some say it’s because of driver over-saturated markets. Others suggest it’s country-wide and not specific to California. While others still say streaks were booming during the election season to help sway votes toward passing Prop 22, and now that it has passed, perks for drivers are disappearing.
Drivers for the other apps are quiet on the internet when it comes to changes that are happening, so that tells me that either the other apps aren’t making significant changes, or the changes are so well hidden that no one knows they are happening…yet.
My Take on Grubhub’s Changes to Tipping
Short version: It’s a bad move.
Long version: I see what Grubhub is trying to do, and it should have been obvious to them from the conception that this would not go over well. It’s hard to imagine someone thinking, “Yeah, this is great! Drivers will get fewer tips and customers will pay for the driver benefits. It’s a win-win!”
No. Somewhere along the way, someone at Grubhub would have pointed out this wouldn’t go over well with drivers, but somehow it was approved anyway.
It’s shady that Grubhub is having the customers pay for the driver benefits while also discouraging the customers from tipping. Giving a $0 option for a tip is simply telling customers “Don’t tip your driver!” And, it’s not like the “Driver benefits” fee is going directly to all of the delivery driver’s pockets.
If a driver does not complete enough deliveries each quarter, they will not receive the healthcare subsidiaries. Or if they already have health insurance through a spouse or other job, they wouldn’t even qualify in the first place. And on top of that, with this new system, they likely will not get as many tips as they normally would.
Now, time for me to play devil’s advocate. Did no one see this coming? The payment for the added benefits was going to have to come from somewhere. And we all know that companies like these tend to put the needs of the customers over the needs of their drivers.
Grubhub doesn’t want the customer to feel like they are suddenly paying more for the same service. So, instead, Grubhub is encouraging lower tips and telling the customer that drivers don’t need the tips to get by.
In an average customer’s mind, they’re probably thinking, “Great! Prop 22 is doing what the drivers wanted. They are getting benefits and don’t need to survive on tips anymore!”
Or, the average customer didn’t even notice a difference.
From here, it’s all about how Grubhub responds. Will they go back to the old system while keeping the new “Driver benefits” fee? Or will they say, SOL to drivers and keep their new system?
What do you think will happen?
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-Paula @ RSG