Only seven states currently bar “subminimum” pay for tipped workers like bartenders and restaurant servers, but activists see 2024 as ripe to expand the tally to as many as 20.
The “contractor” model is valid. When you hire a kid to shovel your driveway, for example, you are not “employing” that kid; you are contracting him to perform a specific task. Landscapers, builders, roofers, plumbers, lawyers, accountants, DJs, wedding planners… Most small businesses operate on a contractor basis.
The real issue with these services is one of semantics. DoorDash gives drivers a few pieces of information. They are told where the pickup location will be, where the dropoff location will be, the total distance they will have to drive, and, critically, the total amount of money they can expect to receive for performing that task. The driver is (ostensibly) free to accept or reject that offer. DoorDash may bundle (“stack”) your delivery task with other delivery tasks and offer the entire bundle as a single task.
In a contractual arrangement, the money offered in compensation for performance of a task is the “consideration”. The offering of money in exchange for a service is a “bid”. That’s the semantic issue: most of the money being offered to the driver is being called a “tip”. It does meet the IRS definition of a “tip”, but it does not meet the colloquial use of that term.
DoorDash is not actually a courier service. DoorDash does not operate a single vehicle used for package delivery to customers. DoorDash is a broker of courier services. DoorDash connect customers to vendors and drivers. DoorDash takes the customer’s task and offer of compensation and offers it to contract drivers. If they find a match, the customer gets their food. If they can’t find a match, it sits on the vendor’s shelf until closing, then gets thrown away.
You and your elderly relatives are free to use the service. You can use it ethically, simply by understanding that what they are calling a “tip” is actually a “bid” to the driver. So long as you are placing a reasonable “bid”, your use of the service is fair and ethical.
The “contractor” model is valid. When you hire a kid to shovel your driveway, for example, you are not “employing” that kid; you are contracting him to perform a specific task. Landscapers, builders, roofers, plumbers, lawyers, accountants, DJs, wedding planners… Most small businesses operate on a contractor basis.
The real issue with these services is one of semantics. DoorDash gives drivers a few pieces of information. They are told where the pickup location will be, where the dropoff location will be, the total distance they will have to drive, and, critically, the total amount of money they can expect to receive for performing that task. The driver is (ostensibly) free to accept or reject that offer. DoorDash may bundle (“stack”) your delivery task with other delivery tasks and offer the entire bundle as a single task.
In a contractual arrangement, the money offered in compensation for performance of a task is the “consideration”. The offering of money in exchange for a service is a “bid”. That’s the semantic issue: most of the money being offered to the driver is being called a “tip”. It does meet the IRS definition of a “tip”, but it does not meet the colloquial use of that term.
DoorDash is not actually a courier service. DoorDash does not operate a single vehicle used for package delivery to customers. DoorDash is a broker of courier services. DoorDash connect customers to vendors and drivers. DoorDash takes the customer’s task and offer of compensation and offers it to contract drivers. If they find a match, the customer gets their food. If they can’t find a match, it sits on the vendor’s shelf until closing, then gets thrown away.
You and your elderly relatives are free to use the service. You can use it ethically, simply by understanding that what they are calling a “tip” is actually a “bid” to the driver. So long as you are placing a reasonable “bid”, your use of the service is fair and ethical.