Just do away with tips. It's a terrible and stupid system. If you want to do it as a customer, go ahead, but it should never be considered as part of the employee's compensation. If people aren't willing to do the job for the hourly wage alone with no tips, raise the wage until they are.
Tips are fundamentally broken. If you didn't know about tips, and someone offered you a job and said, "I'll pay you crap wages, but you can ask the customers for more money. Don't worry, they'll pay or their friends won't like them," you'd think it was a scam because it's such an obviously terrible deal.
Tips are an awful way to incentivize good service.
I'm neither qualified to judge my server's performance, and I've got very limited and potentially misleading information about what a reasonable expectation is. I've got no idea what small crises my server had to deal with, or how other customers are treating him.
And because tips are everywhere now, nobody knows the going rate for most tips. Obviously tourists have no idea how much to tip.
If I reduce the tip, the waiter is only finding out that I was unsatisfied after it's too late to fix anything. But tipping up front makes the exercise entirely pointless.
And the moralizing of tips is stupid.
Many moral arguments paint people in the service industry as paupers or victims, but a basic level of respsect has to assume they're competent professionals who chose this line of work.
A tip is not an act of generosity, either, you're paying a fee for a service rendered. And that's why, as a system, the morality of tipping is entirely backwards: it rewards people who rip off their servers.
The thing that really bothers me are the awful motivations behind tipping: being control freaks, conspicuous consumption and all the slimy business incentives to push their payroll onto their customers.
This is a reasonable comment, and seems a fairly popular idea. But is this the most important comment thread, to be voted to the top, on this particular post?
The topic of the post is alleged blatant theft of tips. The question of whether there should be tips in the first place could be a diversion from the more immediate topic.
I've said it before, the only way to get out of the tipping culture is to stop tipping, and to continue to fight for a raised minimum wage. There's just no way around it, that's how some other countries got out of the tipping culture too. Shaming others who don't tip, and tipping when you go out, just contributes to the problem.
If people understand that tipping is actually less of a thing, then the pressure will be on the employers, not the customers.
I know I'll get downvoted for saying that, because we're still much in a "if you don't tip you're an asshole" culture. But I personally have decided that I will contribute to the solution by not tipping.
Tips have become so detached from their original intention too. I've been to so many places (pre-covid) that asked for tips upfront during checkout before I've received any service. How would I know what the service would be like and therefore how much to tip? Might as well call it a surcharge and be done with it.
I guess same thing now with food deliveries, but at least I can change the tips (I think?) afterwards if something wasn't good.
What I dislike about a culture of tipping is that in effect it's a transfer of wealth from the generous+agreeable customer to the greedy+disagreeable+shameless customer.
I still advocate tipping since it's a nice thing to do and probably improves your happiness, but I think it's healthier in the context of a no-tipping culture where wages are sufficient and baked into the price of the service.
> If people aren't willing to do the job for the hourly wage alone with no tips, raise the wage until they are.
Agree with the first part, but would rephrase this second part as:
If people aren't able to live off a minimum wage salary to do the job for the hourly with no tips, raise the minimum wage until they are.
This isn’t an issue people can solve on their own by changing jobs. It’s a systemic problem where the minimum wage has been stagnating for years, while the cost of living has been skyrocketing, and thus felt most by non-knowledge workers.
> If people aren't willing to do the job for the hourly wage alone with no tips, raise the wage until they are.
This would be the case in a normal free market, but unfortunately the labor market is not a free market as people don't have the choice to work or not to work - they need to work to survive.
As long as millions of people are out of a job, there will be millions desperate to work even for under minimum wage, ready to replace anyone who quits.
This is why there are two things needed - first, a minimum wage not defined in dollars (to account for rent and other CoL differences) but in "is enough to rent a decent home in the area and live without a second (or worse, third) job or government assistance programs", and second, a universal basic income that fulfills the same requirement. Only then, when people have the freedom of choice between working or not, will labor prices reflect the true value of the labor.
I have the same problem with any "bonuses". Everyone who is paid a bonus inevitably starts thinking about it as part of their income. Banks don't help this as many of them will take bonuses into account when supplying loans. But your employer doesn't think of bonuses this way. Your employer thinks of a bonus as part of your pay they can take away at a moment's notice for any reason at all. Many of them will try to put workers on a lower salary and claim that the bonus makes up for it. Say no to bonuses! Agree what your time is worth and stick to it!
Consumers / customers should also be on board with this though; there are plenty of experiments in e.g. the service industry with a "no tips" policy, and especially the older generation has problems with it. The same type that will use low/no tips as "punishment", mind you.
Each time I order with Glovo I tipped with cash directly to the driver. The 'online' tip has to be one of the dumbest features ever and just stinks of something shady going on.
I appreciate your comment but it's tangential to the article - in this case it's not really about tips but stealing from people who depend on you, and basically getting away with it.
this is sort of a microcosm of socialism vs capitalism. that being the complex discussion that it is, i think your claim that its a "terrible and stupid system" is far from obviously true, if true at all.
1) its entirely possible and common to make a living wage in the tip system. my wife and i just ran the numbers and she grossed ~17$/hour between her two restaurant tip-based jobs - during COVID with capacity restrictions and lack of patronage (for cost of living reference, our house is ~$125/square foot so we're certainly not in NY or SV).
2) the tip system provides opportunity. it is a way for someone with no skills, education, prospects, or CV to start making steady money. eliminating it increases the risk for hirer as they their hiring cost changes astronomically from ~3$/hr to 10-20$/hr. this will close a window for advancement as taking chances on under-performing employees is more expensive; this results in an increase in heritable wage stratification as another path to the american dream is closed.
3) performance incentives are good by definition. you want all systems to have incentives aligned with the desired outcome. i dont see how removing the incentive structure improves the outcome for anyone except bad servers.
4) restaurants dont get a cut of tips. it is a direct transaction between customer and server (less taxes, obviously). this is the peak of efficiency. by forcing restaurants into being a middleman, you are creating a rent-seeker and lowering real economic output.
5) 2 and 4 make it more dangerous to open a new restaurant. raising the bar for entry into any business scenario is generally undesirable and produces less competition and creativity. less success and more expensive failure.
I'm kind of intrigued by the opposite idea: extend the system of tips to everything. I'd gladly add a tip to many things I buy if I knew that it would go entirely to the workers and not one penny would go to the owners, managers, or executives.
Tips are a kind of direct income redistribution. If I think someone deserves more money, I can directly give it to them. There's no middleman, no politics, and no stigma about charity.
I have a few friends in the service industry who prefer the tips model since the tips are often 200-300% of their base pay. If it switched to fixed hourly pay, they'd be taking a pay cut since there is no way their hourly pay would be $30/hr.
I'm sure famously low margin, high risk places like restaurants can easily raise employee wages anywhere form 2 to 6 fold. As I said downthread, all a restaurant has to pay is $2.13 an hour if they make enough tips to earn an effective wage of over $7.25 an hr in a week. That's $290 a week for 40 hours of work pretax.
For a tech comparison look at Amazon's Mechanical Turk. It probably is closer to the $2.13 minimum wage in practice than the $7.25 one for what I hear. Now imagine they had to raise what they paid to make sure its an effective $15 an hour based on spending an hour.
You think it would still exist? Would you pay that much? Or is it's value proposition precisely because you can pay them shit wages overall?
I don’t think you’ve worked a job where you got tipped, have you?
It’s actually one of the few ways people can make a lot of money for doing a good job. What you describe punishes hard work, the people getting tips would hate it.
-Incentivize doing your job. I don't expect anything crazy and give 20% as long as you did the baseline properly. If you can't be assed to read or follow a two sentence delivery instruction that says how to find me then I'm not rewarding that.
-Result in taking home much more money than otherwise in many cases, else the company still has to make up the difference to minimum wage but that almost never happens in practice
-Let lower income people keep more of their pay, if cash
I really see no compelling argument for eliminating it. If multiplying a two digit number by 2, rounding, and moving a decimal is too hard, we all have calculators in our pockets all day.
> The FTC alleges Amazon changed the way it paid drivers in late 2016, lowering the hourly rate and then used customer tips to make up the difference. Amazon continued to tell drivers they were receiving all of their tips, even after receiving hundreds of complaints from drivers, the agency said.
How is this not simply theft? Why does this attract civil charges and not criminal ones?
> when Amazon steals $62 million from its employees it's "misrepresenting drivers' tips", when Amazon employees steal $130,000 of products from Amazon it's a "theft ring"
I appreciated samizdis’ comment, which I’ll just copy in full:
FTC Commissioner Rohit Chopra has also put out a statement [1], titled Regarding the Deception of Delivery Drivers by Amazon.com Commission File No. 1923123
Some extracts:
> In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line. ...
> ... Amazon executives chose not to alter the practice, instead viewing drivers’ complaints as a “PR risk,” which they sought to contain through deception. ...
> Today’s order provides substantial redress to the families victimized by Amazon’s anticompetitive deception. However, this cannot be the only action we take to protect workers and families from dominant middlemen. ...
> I also agree with Acting Chairwoman Slaughter and Commissioner Phillips that preying on workers justifies punitive measures far beyond the restitution provided here, and I believe the FTC should act now to deploy dormant authorities to trigger civil penalties and other relief in cases like this one.
One of the few things in 2020 that I felt good about was being able to tip the Amazon Fresh delivery drivers.
Now I hear that those essential workers, who helped save me and my neighbors from Covid, were getting cheated out of tips, intentionally, by higher-ups at Amazon.
And I'm guessing the money meant a lot more to someone who's delivering groceries in a pandemic, than it does to a trillion-dollar corporation. And presumably the higher-ups knew that.
Making the drivers whole, and expressing contrition, seems like repaying maybe 10-fold the amount stolen, plus interest, is a start.
That's from the corporate side, but corrective action shouldn't stop there. Are we going to see a criminal investigation, and possible charges against individuals who knew what was going on, yet didn't correct or report it?
The solution is to stop using Amazon products. The company is hugely exploitative in many ways - we should stop being surprised and just spend our money elsewhere.
> Amazon agreed to pay the regulator $61.7 million, the amount the FTC claims the company shorted its drivers ... Law precludes the agency from additionally fining the company
WTF. The penalty is not getting to keep the stolen money? American labor law is embarrassing.
The biggest part of the story to me is that Amazon is not paying a single cent in fines. They are only paying the amount owed to the drivers. It's a shame a company can get away with this without facing a penalty.
he FTC chairman said this about the ruling, and it looks like they are pushing forward with punitive measures as well:
> Today’s order provides substantial redress to the families victimized by Amazon’s anticompetitive deception. However, this cannot be the only action we take to protect workers and families from dominant middlemen. ...
When you think tipping, remember it’s origins in feudal Europe, and American slavery. “the Pullman Company, which hired newly freed African American men as porters. Rather than paying them a real wage, Pullman provided the black porters with just a meager pittance, forcing them to rely on tips from their white clientele for most of their pay.”
I'm not sure that its fair to claim that tipping has origins in American Slavery. In the Pullman case, the workers eventually formed the first major African American union and successfully won better pay from the railroads, in 1918.
There's also Wikipedia's suggestion that tipping as a way to make up for lower wages as a wider practice came about as a result of Prohibitions effect on Hotels and Restaurants. [1]
I would love to see the federal minimum wage exemptions for tipped workers removed. We're all of course going to roast Amazon for this unethical practice, but thousands upon thousands of businesses operate the same skimming operation on tipped workers in states that allow it.
Forget "theft of interest", it's just plain theft. A thief doesn't get to apologize, give back what they stole, and then walk away. If you or I committed theft on this scale we'd be in prison for decades.
ffs, the whole discussion just went on a tangent around tipping culture wherein the real issue here is about stealing. customer transacted that money for the driver, but it was used elsewhere. that's the issue here not tipping.
I don't think gig economy is working for the hard-working workers. We were doing Instacart delivery of groceries until we found out that they punished workers for demanding -- get this -- a livable wage and common decency [0][1]. Doordash has been caught stealing tips too [2]. All of them (Uber, Lyft etc) spent $200m to ensure that their workers would not get a living wage and health benefits [3].
With every passing month, I'm realizing that the gig economy works only when the worker class is exploited, and the exploitation is opaque from the customer.
[0] Instacart can go f*ck itself - we'll go pick up our own groceries.
> I don't think gig economy is working for the hard-working workers. We were doing Instacart delivery of groceries until we found out that they punished workers for demanding -- get this -- a livable wage and common decency [0][1]. Doordash has been caught stealing tips too [2]. All of them (Uber, Lyft etc) spent $200m to ensure that their workers would not get a living wage and health benefits [3].
You have only established that American companies steal from their gig workers. But maybe a Chinese, European or Japanese company could make gig economy work more honestly?
If Bezos knew about this then he should be held responsible for theft on a massive scale. At some point, the legal system has to stop protecting worker exploitation. These types of things should be criminal matters.
Kind of weird that the law prevents the agency from additionally charging the company. If you screw someone over, why should you not pay them some extra compensation for the trouble they've gone through?
Reminds me of the time the team I worked with allegedly short-changed Discover, an advertiser with Amazon. The story went... people who reported it internally got fired: https://news.ycombinator.com/item?id=8600716
Usually, I have seen these things happen due to bugs (or worse, wanting to game metrics); and because Amazon can be ruthless with data determining a lot of decisions, very few (not all), especially at the top, are willing to admit incorrect metrics that might jeopardize their standing with the leadership.
If you’re in San Francisco there are a lot of restaurants that do not accept tips. Check Zazie, for example. But there are a bunch of lists out there. If you are tipping, you are part of the problem.
[+] [-] imgabe|5 years ago|reply
[+] [-] ben509|5 years ago|reply
Tips are an awful way to incentivize good service.
I'm neither qualified to judge my server's performance, and I've got very limited and potentially misleading information about what a reasonable expectation is. I've got no idea what small crises my server had to deal with, or how other customers are treating him.
And because tips are everywhere now, nobody knows the going rate for most tips. Obviously tourists have no idea how much to tip.
If I reduce the tip, the waiter is only finding out that I was unsatisfied after it's too late to fix anything. But tipping up front makes the exercise entirely pointless.
And the moralizing of tips is stupid.
Many moral arguments paint people in the service industry as paupers or victims, but a basic level of respsect has to assume they're competent professionals who chose this line of work.
A tip is not an act of generosity, either, you're paying a fee for a service rendered. And that's why, as a system, the morality of tipping is entirely backwards: it rewards people who rip off their servers.
The thing that really bothers me are the awful motivations behind tipping: being control freaks, conspicuous consumption and all the slimy business incentives to push their payroll onto their customers.
[+] [-] neilv|5 years ago|reply
The topic of the post is alleged blatant theft of tips. The question of whether there should be tips in the first place could be a diversion from the more immediate topic.
[+] [-] efwfwef|5 years ago|reply
If people understand that tipping is actually less of a thing, then the pressure will be on the employers, not the customers.
I know I'll get downvoted for saying that, because we're still much in a "if you don't tip you're an asshole" culture. But I personally have decided that I will contribute to the solution by not tipping.
[+] [-] yibg|5 years ago|reply
I guess same thing now with food deliveries, but at least I can change the tips (I think?) afterwards if something wasn't good.
[+] [-] hntrader|5 years ago|reply
I still advocate tipping since it's a nice thing to do and probably improves your happiness, but I think it's healthier in the context of a no-tipping culture where wages are sufficient and baked into the price of the service.
[+] [-] beckman466|5 years ago|reply
Agree with the first part, but would rephrase this second part as: If people aren't able to live off a minimum wage salary to do the job for the hourly with no tips, raise the minimum wage until they are.
This isn’t an issue people can solve on their own by changing jobs. It’s a systemic problem where the minimum wage has been stagnating for years, while the cost of living has been skyrocketing, and thus felt most by non-knowledge workers.
[+] [-] adammenges|5 years ago|reply
[+] [-] mschuster91|5 years ago|reply
This would be the case in a normal free market, but unfortunately the labor market is not a free market as people don't have the choice to work or not to work - they need to work to survive.
As long as millions of people are out of a job, there will be millions desperate to work even for under minimum wage, ready to replace anyone who quits.
This is why there are two things needed - first, a minimum wage not defined in dollars (to account for rent and other CoL differences) but in "is enough to rent a decent home in the area and live without a second (or worse, third) job or government assistance programs", and second, a universal basic income that fulfills the same requirement. Only then, when people have the freedom of choice between working or not, will labor prices reflect the true value of the labor.
[+] [-] globular-toast|5 years ago|reply
[+] [-] Cthulhu_|5 years ago|reply
[+] [-] melomal|5 years ago|reply
[+] [-] sokoloff|5 years ago|reply
[+] [-] dvfjsdhgfv|5 years ago|reply
[+] [-] kryogen1c|5 years ago|reply
1) its entirely possible and common to make a living wage in the tip system. my wife and i just ran the numbers and she grossed ~17$/hour between her two restaurant tip-based jobs - during COVID with capacity restrictions and lack of patronage (for cost of living reference, our house is ~$125/square foot so we're certainly not in NY or SV).
2) the tip system provides opportunity. it is a way for someone with no skills, education, prospects, or CV to start making steady money. eliminating it increases the risk for hirer as they their hiring cost changes astronomically from ~3$/hr to 10-20$/hr. this will close a window for advancement as taking chances on under-performing employees is more expensive; this results in an increase in heritable wage stratification as another path to the american dream is closed.
3) performance incentives are good by definition. you want all systems to have incentives aligned with the desired outcome. i dont see how removing the incentive structure improves the outcome for anyone except bad servers.
4) restaurants dont get a cut of tips. it is a direct transaction between customer and server (less taxes, obviously). this is the peak of efficiency. by forcing restaurants into being a middleman, you are creating a rent-seeker and lowering real economic output.
5) 2 and 4 make it more dangerous to open a new restaurant. raising the bar for entry into any business scenario is generally undesirable and produces less competition and creativity. less success and more expensive failure.
[+] [-] xirbeosbwo1234|5 years ago|reply
Tips are a kind of direct income redistribution. If I think someone deserves more money, I can directly give it to them. There's no middleman, no politics, and no stigma about charity.
[+] [-] bagacrap|5 years ago|reply
[deleted]
[+] [-] refurb|5 years ago|reply
[+] [-] Noos|5 years ago|reply
For a tech comparison look at Amazon's Mechanical Turk. It probably is closer to the $2.13 minimum wage in practice than the $7.25 one for what I hear. Now imagine they had to raise what they paid to make sure its an effective $15 an hour based on spending an hour.
You think it would still exist? Would you pay that much? Or is it's value proposition precisely because you can pay them shit wages overall?
[+] [-] buzzdenver|5 years ago|reply
[+] [-] lettergram|5 years ago|reply
It’s actually one of the few ways people can make a lot of money for doing a good job. What you describe punishes hard work, the people getting tips would hate it.
[+] [-] jimmaswell|5 years ago|reply
-Incentivize doing your job. I don't expect anything crazy and give 20% as long as you did the baseline properly. If you can't be assed to read or follow a two sentence delivery instruction that says how to find me then I'm not rewarding that.
-Result in taking home much more money than otherwise in many cases, else the company still has to make up the difference to minimum wage but that almost never happens in practice
-Let lower income people keep more of their pay, if cash
I really see no compelling argument for eliminating it. If multiplying a two digit number by 2, rounding, and moving a decimal is too hard, we all have calculators in our pockets all day.
[+] [-] peteretep|5 years ago|reply
How is this not simply theft? Why does this attract civil charges and not criminal ones?
[+] [-] darwinwhy|5 years ago|reply
~ https://twitter.com/CitationsPod/status/1356779651885133825
[+] [-] ryanwhitney|5 years ago|reply
I appreciated samizdis’ comment, which I’ll just copy in full:
FTC Commissioner Rohit Chopra has also put out a statement [1], titled Regarding the Deception of Delivery Drivers by Amazon.com Commission File No. 1923123
Some extracts:
> In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line. ...
> ... Amazon executives chose not to alter the practice, instead viewing drivers’ complaints as a “PR risk,” which they sought to contain through deception. ...
> Today’s order provides substantial redress to the families victimized by Amazon’s anticompetitive deception. However, this cannot be the only action we take to protect workers and families from dominant middlemen. ...
> I also agree with Acting Chairwoman Slaughter and Commissioner Phillips that preying on workers justifies punitive measures far beyond the restitution provided here, and I believe the FTC should act now to deploy dormant authorities to trigger civil penalties and other relief in cases like this one.
[1] https://www.ftc.gov/system/files/documents/public_statements...
[+] [-] neilv|5 years ago|reply
Now I hear that those essential workers, who helped save me and my neighbors from Covid, were getting cheated out of tips, intentionally, by higher-ups at Amazon.
And I'm guessing the money meant a lot more to someone who's delivering groceries in a pandemic, than it does to a trillion-dollar corporation. And presumably the higher-ups knew that.
Making the drivers whole, and expressing contrition, seems like repaying maybe 10-fold the amount stolen, plus interest, is a start.
That's from the corporate side, but corrective action shouldn't stop there. Are we going to see a criminal investigation, and possible charges against individuals who knew what was going on, yet didn't correct or report it?
[+] [-] billynomates111|5 years ago|reply
[+] [-] naebother|5 years ago|reply
> Amazon agreed to pay the regulator $61.7 million, the amount the FTC claims the company shorted its drivers in tips over a 2½ year period.
Can the common man also get this kind of generous treatment from the law - just pay back what you stole and move on?
[+] [-] cheriot|5 years ago|reply
WTF. The penalty is not getting to keep the stolen money? American labor law is embarrassing.
[+] [-] EnderWT|5 years ago|reply
[+] [-] simonh|5 years ago|reply
> Today’s order provides substantial redress to the families victimized by Amazon’s anticompetitive deception. However, this cannot be the only action we take to protect workers and families from dominant middlemen. ...
[+] [-] underseacables|5 years ago|reply
https://www.politico.com/magazine/story/2019/07/17/william-b...
[+] [-] akira2501|5 years ago|reply
There's also Wikipedia's suggestion that tipping as a way to make up for lower wages as a wider practice came about as a result of Prohibitions effect on Hotels and Restaurants. [1]
[1]: https://en.wikipedia.org/wiki/Gratuity#History
[+] [-] mullingitover|5 years ago|reply
[+] [-] potiuper|5 years ago|reply
[+] [-] shkkmo|5 years ago|reply
[+] [-] xirbeosbwo1234|5 years ago|reply
Forget "theft of interest", it's just plain theft. A thief doesn't get to apologize, give back what they stole, and then walk away. If you or I committed theft on this scale we'd be in prison for decades.
[+] [-] slumpt_|5 years ago|reply
“Amazon stole 61.7M in tips from their own drivers.”
That’s better.
[+] [-] wscott|5 years ago|reply
[+] [-] lopegwapo|5 years ago|reply
[+] [-] 0goel0|5 years ago|reply
With every passing month, I'm realizing that the gig economy works only when the worker class is exploited, and the exploitation is opaque from the customer.
[0] Instacart can go f*ck itself - we'll go pick up our own groceries.
[1] https://techcrunch.com/2021/01/21/instacart-is-eliminating-t...
[2] https://www.nytimes.com/2019/07/24/nyregion/doordash-tip-pol...
[3] https://en.wikipedia.org/wiki/2020_California_Proposition_22
[+] [-] sampo|5 years ago|reply
You have only established that American companies steal from their gig workers. But maybe a Chinese, European or Japanese company could make gig economy work more honestly?
[+] [-] ilaksh|5 years ago|reply
[+] [-] dannyw|5 years ago|reply
The system is working as intended.
[+] [-] Cyclone_|5 years ago|reply
[+] [-] tudorconstantin|5 years ago|reply
[+] [-] msiyer|5 years ago|reply
[+] [-] ignoramous|5 years ago|reply
Usually, I have seen these things happen due to bugs (or worse, wanting to game metrics); and because Amazon can be ruthless with data determining a lot of decisions, very few (not all), especially at the top, are willing to admit incorrect metrics that might jeopardize their standing with the leadership.
You're what you measure.
[+] [-] baby|5 years ago|reply
[+] [-] worik|5 years ago|reply