Tips are currently serving several purposes in users' minds:
1. earned for great service
2. to make up for lower base pay (tipped min wage is lower in many US states)
3. to help employees who they feel aren't making enough
Now reasons #2 and #3 are no longer true because driers are now fairly (IMHO) compensated through the guaranteed wage. How many users actually know about this?
Sure more money is flowing into the drivers' pockets, but doesn't this just continue to muddle the usage of tips and ultimately cost the consumer more?
When NYC enforced a liveable wage, the delivery apps raised holy hell including intrusive popups in the ads telling you how horrible it was for you the innocent consumer, plus added a special extra charge to rub it in.
They ALSO at this time moved the tip to post-checkout which was just an asshole, anti-driver move, explicitly to punish drivers. Tip before checkout was the norm and they changed it in an openly spiteful move.
Even those who like tipping tipped less because now you had to remember to go back to your app to tip. The net effect of the spiteful move was to punish drivers.
When service work is strongly organized and represented we can start talking about changing tipping culture.
1. Stop raising minimum wage. It doesn't do what you think it does. And if hang around any politicians' backoffices anyway, you realize the only reason this is ever raised is to manipulate voter turnout. Not difficult, just difficult to explain since it deals with second and third order consequences.
2. Do not let employers include tips as part of meeting minimum wage law. If minimum wage is $8/hr, then employers must pay $8/hr. Wages are paid by employers. Tips are not paid by employers. Also not difficult.
3. No Taxes on tips, anywhere. These aren't wages, and are not subject to wage or payroll taxes. Also, not difficult.
And lastly, tips before services rendered are stupid. Everyone knows it and is confused by it. It's something that needs to go away, but that isn't something that should be regulated into existence.
2) (Unambiguously yes) If your business does not make financial sense without tips, then it isn't a business. There are many businesses that can't currently compete with businesses' that tip, see next point.
3) (Modestly disagree) I would support a 50% tax on tips in general. It should be something that only the wealthy do as a flex, not something that we are normalizing among 95% of the population.
Regarding 1: How does society guarantee a worker gets sufficient compensation for their work, and receives enough money to live in the area where they work in order to afford housing and food and healthcare?
We see trillion dollar companies paying their workers minimum wage, and scheduling workers below full time to avoid providing them benefits. We subsidize Walmart when their workers need food stamps to survive. Without a minimum wage it would be even worse.
1. If "tips" in the US are "compulsory" because customers should make up for the poor wage the delivery people get paid, why is there still a compulsion for tipping now as the wages have been increased (and presumably is "fair")?
2. And if the wages are "fair" now, why should a customer be forced to tip when they are making an order, rather than after they have received the order and can determine if the worker deserved a tip for satisfactory or exemplary service?
I absolutely understand the need to regulate corporates to ensure that they didn't steal the tips or lower their workers' salary based on it. My questions pertain to consumer rights. The government has rightly addressed the needs of the workers and preserved their right to a "fair" wage. But how is regulation that forces customers to tip at checkout itself (even before one has experienced the service) fair to the customers? (And ofcourse, by asking for a tip before checkout, you are forcing customers to give tip because apparently delivery people can see if someone has tipped or not before accepting an order, and most delivery people do not accept orders without tips or tend to de-prioritise it). Democracy is meant to balance everyone's right. Instead of forcing corporates to pay a fair wage, the government has (yet again) transferred part of the burden to customers (this time directly, instead of indirectly through taxes) and even thinks this is something to brags about:
> ... show tips nearly doubled after the city started enforcing the law and were “proof” that the apps were wrong about New Yorkers’ willingness to tip delivery drivers ... New Yorkers are consumers, but we are workers too. We want to support our neighbors who bring meals, groceries, and medicine to our doors.
Yeah, right - if someone is forced to tip because the system is designed around tips, that's not good grace driving the customers to tip. I am left to believe that this was a deliberate concession made to the corporates because it is in their interest that delivery people earn more (as long as they don't have to pay for it). So while the government maybe did do a good job in balancing the rights of the corporates and the workers, it has ignored the rights of consumers and deliberately sacrificed it.
I vaguely remember seeing a post on Reddit showing a vending machine asking for a tip.
Arguments about mandatory tipping are an expression of a power struggle between large companies, small business, workers and customers. As usual, the predominant news available to consumers paints the details in incomplete ways.. Journalists are not doing original economic research, and powers-that-be won't speak plainly.
ps- undocumented workers in retail food and commercial food supply are certainly part of this story in the USA.
source: opinion