Gigantic rant follows. Ye have been warned.
Okay, so as some of you already know, I delivered pizzas for a living and still do when I’m not doing other things. And for those who make a decent living from tips, good for you. But not everyone does, and it opens the door for really stupid crap.
I could get into the whole spiel about how much it sucks when you earn tips for a living and the asshole on the customer side of things doesn’t agree with the whole tipping concept. But that’s not even the main issue.
Here’s the main beef with tipping- the hidden costs.
Let’s use my business as an example. If you order a large pizza, and you elect to come pick it up when we’re finished making it, it’s 10 bucks plus tax. That ten dollars pays for the food to be delivered to the store, stored, cooled, frozen, prepped, portioned, assembled, baked, cut, boxed, sealed, bagged, and ready for you to eat. And every person along the way from the truck driver who delivered it, to the people cooking and assembling it, all got paid a fair wage along the way.
Now, say you want it delivered. Oh, that’s fine, the pizza is still ten dollars, except… there’s something called a “delivery fee”.
What’s the fee used for? Ostensibly, to pay the delivery driver for his mandatory gasoline expenses. It just barely covers this, because (did you know?) the entire delivery fee does not go to the driver. Only the portion allotted for the gasoline. Who keeps the rest? Why, the business charging you the fee, of course. So let’s say the driver sees between 30 cents and a dollar of that fee (which is the most recent structure, having been changed within the past month) where does the other two dollars go?
Well, if we look at things from an expenses point of view, there’s an extra set of hands handling your food. So, that’s an added expense.
Except the driver’s making 4 bucks an hour, since this is supposedly a “tipping” profession. And the driver is making more than two deliveries an hour (or else he sucks at this job).
So, the expense of having the driver at all is offset… completely… and THENSOME… by the delivery fee alone. The driver gets out of this deal, his gasoline expenses paid for, and half a living wage.
From where comes the money to pay for his $200 a month in automotive insurance? That’s over a week’s worth of wages. So he works the first week and a half of his job every month for free, just for the privilege of having a portion of the risks associated with driving for a living covered by an insurance carrier. Almost a third of his monthly wage is gone right off the bat. Now factor in the depreciation, wear and tear, additional maintenance, tires, oil, and idiots scratching/slamming your car doors while you’re parked, and you easily see half your monthly wage (what you see on your paycheck) completely bleedin’ gone before you even get started with your actual living expenses. And of course, keep in mind your monthly wage is half of an actual living wage as it stands.
So that’s an expense of at least 300-400 dollars a month sunk costs associated with the business. Is that compensated for? No, because it comes out of the worker’s pay. It’s not added on, like the gasoline expense is.
Why doesn’t that entire delivery fee go to the worker? Answer: Because why pay the workers a fair form of compensation when you can say look, they’re paid half a wage, plus gas, plus tips. They make their money.
Ah, but where does the rest of the money come from?
Let’s look at the tipping aspect. So after expenses, the worker is earning a good 400 dollars a month, if he’s lucky and gets enough hours. His gasoline and car expenses are now paid for, and he can begin paying his actual personal expenses.
So, before we even pay any rent, we’re already in the red.
Where does the rest of the money come from? Well, supposedly there’s tips involved, yes? Okay. Let’s examine this.
What you just paid:
$10 for the pizza.
$3 for the gasoline, “delivery fee”… only a dollar of that (if that) going to actual gasoline/helping the driver in any way.
$1.50 or more in Taxes. Some of those taxes go for things like food stamps, to help this impoverished worker eat. How about other forms of public assistance to help needy families? These come from your taxes. And these people with actual jobs wouldn’t need any public assistance if the employer actually paid a livable wage.
Let’s pretend we’re tipping as well. Let’s say we give the man a two dollar tip.
$2 tip. Next customer tips nothing. Thats an average of 1 dollar per delivery tips.
What the driver sees:
$4.80 or whatever in wages, per hour.
$1 per delivery on average, times 3-4 deliveries an hour.
$1 or less for gasoline, which evens out the gasoline expense. Just ignore this figure.
$400 a month in expenses related to the job itself. So, negative $400 a month.
Meanwhile, the company just made $12 in delivery fees.
So, the company just paid the driver’s ENTIRE WAGE, and ALL his gasoline expenses.
The driver actually costs the company… NOTHING. And thensome. The driver has now made the company money, because he’s only costing them 8 dollars an hour TOTAL, and he just earned them 12 dollars in delivery fees.
And, because there’s this huge ass delivery fee, *many customers are under the mistaken impression that the tip is included, *and the driver is prohibited from saying jack squat about that at the door. Unless you ask them directly.
And why wouldn’t the tip be included?
Why wouldn’t the worker’s $8 in costs simply be something the company eats, for the privilege of having another $100-$200 worth of delivered food revenue that hour, per worker?
Why wouldn’t the driver see that entire $3 delivery fee? Remember, it’s costing him $400 a month just to operate the friggin delivery vehicle. He’s in the hole for a week and a half before he sees his first dollar, every month.
That would be fair and equitable. Sure, the driver doesn’t make jack if he’s not delivering, he’s only getting half a wage. But when business is good, he’s earning three dollars a delivery. Which means it’s in his best interest to deliver fast and with great service, so he can earn more. And since you’re charging the customers that money to begin with, ostensibly for the “cost” of doing deliveries, why wouldn’t 100 percent of that money end up in the hands of the actual driver?
Then it really wouldn’t matter if customers tipped or not. And many of these drivers wouldn’t need food stamps or other forms of public assistance.
If the point of all this isn’t clear yet, you can be forgiven, but here it goes.
Why is it legal to pay this person less than minimum wage? It costs this person two weeks worth of wages, at 40 hours a week, every month, just to pay legally mandated taxes, regulatory fees, and insurance. These aren’t optional costs. That means their actual take home pay, from their paycheck that they earned from their legal “employer”, is actually less than 384 dollars.
That’s what this person is actually getting paid by their employer. It’s not even close to paying rent, let alone any actual bills. Because none of these other expenses related to the job are being compensated for, yet they’re charging the customer three dollars, and explaining this fee as a way of paying for the cost of delivering. But this isn’t the case.
The actual cost of delivering, must be, from your tip. Because we are all painfully aware, less than 400 dollars is absolutely impossible to live on. And of course, whatever the government helps with in terms of food stamps, subsidized housing, socialized medicine (what little there is) and so forth, that money that they could be, let’s say, earning from their actual employer, they’re not getting from their employer. They’re getting that money through public assistance programs, meaning taxes.
So, 2 bucks tip, 2 bucks in taxes, and 3 dollars in fees, only a dollar of which goes to the driver, and the company is actually EARNING 4 dollars an hour profit from the driver actually being there, snagging 12 dollars an hour in delivery fees for the company.
Bottom line: WHY ISN’T THE COMPANY BEING FORCED TO PAY THE WORKER AN ENTIRE LIVING WAGE?
WHY ISN’T THE COMPANY PAYING THE COSTS ASSOCIATED WITH MAINTAINING A VEHICLE WHILE CHARGING THE CUSTOMER THREE TIMES WHAT THEY ACTUALLY PAY THE WORKER FOR THOSE COSTS?
WHY IS THE WORKER GETTING THE GRAND MAJORITY OF HIS ACTUAL COMPENSATION FROM TAXES AND GRATUITIES AND ADDITIONAL FEES FROM THE CUSTOMER, not from, let’s say, the profits from the 10 dollars per pizza he’s delivering? Or more if you like more than one topping?
At the end of the day, YOU the CONSUMER are paying the delivery driver $2 tip, $1 in gasoline, and an additional $2 towards his half-wage, as part of the delivery fee, and then of course, additional funds from state and federal taxes to subsidize these people’s food, housing, and medical care, none of which are actually covered by his actual wages?
So, the actual cost you’re paying per delivery is now upwards of 6 or 7 dollars, and the company that employs this driver is earning more from the driver’s delivery fees than they actually pay the driver, wages and driver reimbursement inclusive.
The company ends up making $4 an hour, instead of paying this driver a livable wage or covering his expenses properly, and it’s costing you the consumer an additional 6 dollars.
Meanwhile, the driver is living a pretty bottom of the barrel life. He’s relying on charity and government assistance to get by. But you are paying a premium for his services and he’s barely seeing any of it. And the company which doesn’t have to pay this employee any healthcare costs, or most of his job-related costs, or even enough to cover his frickin’ rent, gets to saddle you the consumer, and you the taxpayer, with almost all of the costs.
Why wouldn’t the solution be obvious? The solution is you pay the driver a living wage and cover his expenses. Why isn’t it legally mandatory to pay the driver minimum wage? Why is it legal to only give the driver a portion of the delivery fee?
If the “employee” gets most of his actual compensation from the government, from taxes, from already-included additional fees (which are, essentially, taxes, just not collected by the government) and from gratuities, then why is his “employer” even called his employer?
Why does his employer profit from the driver, while paying the driver almost nothing, and shafting the consumer?
The answer is because it’s legal. Because tipping is a thing (for some people not everyone) and that means some bureaucrat who never worked a day in his life decided that since you earn tips, you don’t have to earn a living wage. And now, the businesses that earn a billion dollars a year can “employ” tens of thousands of people AT NO COST TO THEM, but definitely, a cost added to the consumer.
Why shouldn’t businesses be forced to cover more of the costs?
Oh, but Askthepizzaguy, you have no idea how the business world works. If you pay the drivers properly, the business won’t survive!
ORLY? Do you know what percentage of the day’s income goes back out in “labor”?
Because I do. I’m not just a driver. I’m also a manager.
It varies by location, but we can easily do 14%.
That’s 14 percent for the entire staff.
Since the delivery staff is earning half the wage a normal staff person would, and the entire staff is not delivery drivers, you can assume the portion of the “labor” which is spent on drivers is around… 5 percent. Or less.
Now, if you double that, it means labor goes up to 19%.
How could a business survive with an additional cost of 5 percent?!?!?!
Answer: That 10 dollar pizza is now $10.50.
Ten dollars and fifty cents.
Ten dollars and FIFTY CENTS.
That’s how much it SHOULD COST YOU to pay the driver properly. It should cost you 50 cents per pizza.
And how on earth would pizza chains manage to do this?
That’s just not possible, Pizzaguy. You have no idea how the real world works. You have no idea about how businesses work. You’re a socialist commie, pizzaman.
How could a for-profit enterprise possibly pay their delivery drivers minimum wage?
Answer: THEY USED TO DO THIS!!!
They used to pay the drivers minimum wage! About seven years ago. They stopped doing this because someone decided that minimum wage was too good for the average worker, and adopted the legal loophole of “you earn tips, you don’t get to earn a wage.”
And may I remind you, the company in question EARNS 12 dollars per hour, just from the delivery fees alone, per driver, and pays out about 8 dollars total expenditure. Thats 4 dollars per hour NEGATIVE labor cost.
Negative labor cost!
So don’t tell me they can’t afford to pay their workers more.
They don’t because YOUR elected representatives made it legal for them to not do so, and to turn around…
AND CHARGE YOU THE DIFFERENCE!!!
In taxes and fees and “gratuity”.
You pay for the worker, and the worker ends up paying to the company more than the company pays to the worker.
How is that at all a fair, balanced, or equitable system?
Your 10 dollar pizza just went up to 15 or 16 dollars, and the company that “employs” the driver just earned a dollar. They could have cut a dollar off of the delivery fee and still** made the same profit** they do from if you picked it up your damned self.
So thus, the true problem with tipping lay exposed: Not only is it an egregiously unfair system wherein work is exchanged for the possibility of payment (or the possibility of nonpayment) rather than a legally mandated MINIMUM wage, but it also adds an enormous 5 or 6 dollar expense DIRECTLY to the consumer, which should have only, realistically, cost them 50 cents more.
And when Papa John’s guy makes asinine statements about how he’s “gonna have to cut workers hours” just to cover the added expenses of, you know, being forced to cover employee’s healthcare costs instead of letting them ride the “Emergency Room visit with no ability to pay” plan, which is their default plan, you know he’s full of shit.
And so is every other one of the big three companies. They’re full of shit!
They’re charging you in delivery fees SIX TIMES what it should actually cost the consumer, per pizza, what it would cost to properly give a wage to the actual worker, while only paying that worker half a wage, and less than half his job-related expenses.
And then you have to pay a gratuity on top of all that just to make sure the guy can, you know, EAT.
That’s the bullshittingest bullshit of all bullshit.
Yep, in some ritzy neighborhoods, some delivery drivers are earning decent money off of just tips. In others, there needs to be an actual living wage, and it should be legally required.
Legally mandated minimum wage to all workers, everywhere, without exception, NOW.
That’s just for starters. Pay the driver for all his work-related expenses on top of that, and then get rid of that ASININE delivery fee.
It’s not the tip. It is SO not the tip.