Grubhub Changes Tipping In California, Angering Drivers

Grubhub drivers are fuming over a new company policy that has led to dramatically reduced tipping, the Financial Times reported, citing exchanges with drivers and posts by other drivers on the Reddit social media platform.

In November, California voters, by a margin of about 58 percent to 42, adopted Proposition 22, which overturned a fairly young state law that made it harder for companies to deploy gig workers without classifying them as “employees” and providing the benefits employees receive. The ballot measure was supported by major companies that rely upon gig workers.

While preserving the gig-worker status for workers that the companies sought, the ballot measure provided certain benefits for gig workers, such as a track to receiving partial health insurance coverage for those who work enough hours in a week.

In response, according to the Financial Times, Grubhub rolled out a new ordering system for customers — and among other things, it shifts the default tip from around 20 percent to zero, according to the Financial Times.

The reactions the Financial Times found on Reddit included: “The benefits are not nearly high enough to compensate for encouraging no tipping” and “Such (expletive) to drive this wedge between customers and drivers” and “This is chilling. Really disappointing.”

Some California delivery companies — Uber, Door Dash, Lyft and Instacart among them — reportedly have indicated they will increase the fees they charge customers to fund increased payments to gig workers.

In another possible change to compensation within the gig economy, the federal Securities and Exchange Commission is considering a policy that would let gig workers receive up to 15 percent of their pay in their employers’ stock and make it easier for companies to pay mobile workers through stock disbursements.

Following the gig companies’ victory with Proposition 22, opponents of such measures have indicated they may challenge the new California law, and lawmakers in other states have said they may pursue new legislation to make it hard for companies to classify workers as having vendor status rather than employee status.