We may have reached peak “gig” economy
Anecdotes allowed here?<p>Former GrubHub employee here.<p>When you tip with your credit card when ordering through grubhub, 99% of the time it goes to grubhub and it never reaches the driver. Grubhub guarantees a hourly wage, but to keep your tips that you have to earn more then your hourly rate. This means the driver won&#x27;t receive any tips until he&#x2F;she makes themselves free for grubhub. Pretty ingenious IMO, make the driver a contractor so you don&#x27;t pay payroll tax, and the drivers basically work to make themselves free for you to hire.<p>It&#x27;s not that I want the tips, I really do think tipping is a horrendous system and it is &quot;my fault&quot; for signing up to work for them (I was incredibly desperate for money). I just feel it is disingenuous to call it a tip when it should be called a &quot;please pay my driver&#x27;s hourly wage for me&quot; fund. I know that is basically what a tip is, but when someone tips me very well I have this sick feeling in my stomach because they wanted it to go to me not grubhub. That is why I&#x27;m leaving grubhub.<p>I&#x27;ll break it down for you guys how it works because I was confused for a long while about how it works (which is probably by design).<p>You work 8 hours for grubhub. For brevity, lets assume in your area grubhub pays $10 a hour, the mileage they pay you is 25 cents a mile (from restaurant to customer only, you don&#x27;t get anything driving to restaurant) and the delivery fee is $2. You deliver 10 deliveries during that time, your (payable) mileage is 40 miles:<p>You worked 8 hours, so your hourly wage is $80. Now lets see how much in tips you need to make before you can start keeping your tips!<p>Delivery fees - $20 Mileage - $10<p>You would need to make $50 in tips to start actually getting your tips.<p>Now I&#x27;m getting a new pizza delivery job where the hourly rate is a couple bucks an hour lower, so my hourly rate in this example would be $8, so while I would only make $64 dollars from my hourly rate, I get to keep my delivery fees, mileage, and tips on top of that.<p>The Grubhub I worked for spreads the work around so that people earn the minimum hourly rate. Why wouldn&#x27;t they? it lowers their labor costs to near zero.<p>If you have to use grubhub tip in cash, or better yet just don&#x27;t tip. I don&#x27;t care I am making the minimum hourly rate 99% of the time. If grubhub can&#x27;t survive without the credit card tips customers intended to go to the driver it shouldn&#x27;t be around.<p>P.S.: I&#x27;ll say again I understood that I signed a contract so grubhub can do whatever it wants. I understand I got a few dollars more over the minimum wage (as if it was worth giving up all that tip money). This entire post was about informing people the deception involved around the credit card tips. If grubhub stands by their practices, then spreading this information around won&#x27;t hurt their business.