Postmates pioneered food delivery in 2011, but is a distant fourth in the US market to DoorDash, GrubHub and Uber’s own Eats services. Together, however, Uber Eats and Postmates will be second in the market after DoorDash, which still holds a large lead.

uber is buying postmates. as a part-time courier who works for both, this is bad news. while both are staunch anti-worker companies, fewer and bigger players means even less worker leverage against platform capitalists. with dwindling options, we’ll be exploited even more harshly

— wilfred chan (@wilfredchan) July 6, 2020

Both Uber and Postmates are cash-negative operations, with Uber alone having lost $2.9 billion in Q1 2020 because of the COVID-19 crisis. Food delivery companies, which rely on non-full-time “gig workers,” are hard to tell apart from a consumer perspective other than pricing. As such, bigger fish are swallowing smaller ones in order to control costs and pricing — to the potential detriment of restaurants, users and, particularly, workers.

“As a part-time courier who works for both [Postmates and Uber Eats] this is bad news,” wrote journalist and gig worker Wilfred Chan on Twitter. “While both are staunch anti-worker companies, fewer and bigger players means even less worker leverage against platform capitalists. With dwindling options, we’ll be exploited even more harshly.”

As TechCrunch notes, companies must pass what’s called the “ABC test” (PDF) to be able to legally classify workers as contractors. They must prove that workers are free from their direct control and do other work outside the scope of their business. Their workers must also be “engaged in an independently established trade, occupation or business of the same nature as the work performed” for them. Boudin says DoorDash workers don’t pass the test.

In the lawsuit, the Attorney General’s office stated:

“DoorDash’s misclassification of workers was no mistake, but instead a calculated decision made to reduce the costs of doing business at the expense of the very workers providing the company’s core service of delivery: the delivery of merchandise from merchants to consumers.”

As for DoorDash, Global Head of Public Policy Max Rettig emphasized how the company provides earning opportunities during the pandemic in a statement sent to Mission Local:

“Now more than ever, Californians from all walks of life look to DoorDash for flexible earnings opportunities, working on average a few hours per week. Throughout the pandemic, DoorDash has supported Dashers on and off the road with free safety equipment, telemedicine, earnings replacement, and more. Today’s action seeks to disrupt the essential services Dashers provide, stripping hundreds of thousands of students, teachers, parents, retirees and other Californians of valuable work opportunities, depriving local restaurants of desperately needed revenue, and making it more difficult for consumers to receive prepared food, groceries, and other essentials safely and reliably. We will fight to continue providing Dashers the flexible earning opportunities they say they want in these challenging times.”

The policy comes as restaurants across the US and much of the world struggle to stay in business. In most instances, even depending on deliveries to offset not being able to serve diners in their own spaces, some restaurants have closed permanently.

Unsurprisingly, the companies the policy targets aren’t fans. “We support policy and legislation that help restaurants serve their communities, and a path to reopening those businesses must be the focus,” a Grubhub spokesperson told NBC Chicago. “These arbitrary disclosure rules will do exactly the opposite of their intent by causing confusion to consumers.”

The city, however, sees it as a way to make the entire delivery process more transparent. “By providing customers with more transparency when they use these delivery services, we can further ensure not only fair business practices for our restaurants but also maintain the innovation that is essential to this industry,” said Chicago Mayor Lori Lightfoot.

In their defense, both Grubhub and DoorDash lowered their restaurant fees shortly after the coronavirus pandemic began. In Grubhub’s case, it even went so far as to waive fees for independent businesses. They also already provide a breakdown of the fees you pay as a customer. Of course, having more access to information can never hurt consumers, and it will be interesting to see if other cities adopt similar policies. 

With the coronavirus pandemic pushing more and more Americans to self-isolate and stay inside, DoorDash is starting to deliver items from convenience stores. Starting today, the company is partnering with both national and regional chains across the US — including 7-Eleven, Wawa, Casey’s General Store and CircleK — to make essential products like toilet paper, cleaning supplies and snacks available to order. In all, more than 1,800 stores throughout the country are joining the platform, with more to follow in the coming days and weeks.

You can order from a store by tapping the “Convenience” category tab at the top of the app. If you want to keep both yourself and your delivery person safe, there’s a no-contact drop-off option. In some instances, there’s also a pickup option, though that depends on availability.

The result is that many of us — restaurants and consumers alike — are now relying on third-party delivery services like GrubHub and Caviar, which are changing their practices to accommodate the new normal.

DoorDash, which also owns Caviar, has implemented no-contact delivery: Delivery people pick up and drop off packages without interacting face to face with either restaurant workers or customers, by, for example, having them grab prepared bags from a designated table, text customers when they arrive and leave food on a doorstep. The company has detailed information on their websites about best practices for merchants and delivery people. Both services are offering two weeks of paid sick leave to delivery people who are ill or who have been quarantined. Significantly, the company is also waiving commissions for 30 days for independent restaurants new to the app and for pickup orders for existing merchants.

UberEats hasn’t gone quite as far, but will compensate delivery people affected by COVID-19 for two weeks. On its site, it lists a variety of ways it’s making Uber and UberEats safer, including having drivers clean their cars regularly and asking those with COVID-19 to self-isolate. As far as food delivery goes, the company has waived the delivery fee for independent restaurants and rather than instituting contactless delivery company-wide, simply offers an option in the app to have the delivery person leave your food at the door.

Seamless and its parent company, GrubHub, have also instituted contactless delivery. GrubHub is offering two weeks’ support pay to drivers affected by COVID-19, and it has also created a Community Relief Fund, funneling all Donate the Change contributions to charities supporting restaurants and drivers affected by the virus. The company also announced it’s deferring $100 million in commission fees for independent restaurants and is “matching all promotions run by independent restaurants” using its Smart Promotions feature.

In uncertain times, should delivery even be an option?

Still, there is a wider concern which goes beyond the powers of a delivery platform: Researchers are unsure of how long COVID-19 lives on surfaces like paper, cardboard and plastic, all of which are used in food delivery. What should us hungry customers stuck at home be thinking about when we order from restaurants? In uncertain times, should delivery even be an option?

The CDC has said that there isn’t any evidence the virus is being spread through packaging or food itself, but Vaughn Tan, a qualitative sociologist at University College London who studies restaurants and uncertainty, thinks we still need to reevaluate our methods. We “need to simply be much more prudential than probably is necessary,” advised Tan, who expects this situation to last for up to 18 more months. Working with scientists like Jennifer Gardy, the Deputy Director of Surveillance, Data and Epidemiology at the Gates Foundation, he’s put together a best practices guide for the food and beverage industry.

For example, if you’re ordering food from a restaurant, go as contactless as possible, from actual payments to tips to having the delivery person leave the food on your doorstep or in your lobby rather than handing it directly to you. Once you’ve received your food, immediately transfer it from the to-go container on to a clean plate or other container, then dispose of the to-go materials straight away, including any bags. Heat the food for a few minutes to further decontaminate it. Be sure to wash your hands for 20 seconds between each step. “Wash hands, open the container, reheat, wash hands again,” advised Tan.

In other words, we should treat outside containers as if they are contaminated. Rick Camac, Dean of Restaurant and Hospitality Management at the Institute of Culinary Education, agrees. He said pickup and delivery using third-party apps are safe “but their approach to carrying packages and engaging customers has to change.”

“Just like a restaurant kitchen, bathroom and/or dining room, extra sanitary precautions need to be taken with delivery. Everything from handling to delivery itself needs to be rethought,” Camac said to Engadget in an email. “For instance, did the Uber Eats driver just drop off a passenger right before picking up your delivery package? In this case, is the car sanitized in between? Is food always held in the trunk? If so, what is being done to control temperature (a truck could be extremely hot or cold)?”

“I don’t believe [third-party delivery services] can guarantee anything.”

This exposes a gap in the gig-economy delivery model: Despite the guidelines of a restaurant or app, it’s hard to guarantee that the delivery itself was hygienic. “I’m not aware of any measures to guarantee the guidelines are followed,” a GrubHub spokesperson said to Engadget in an email, referring to the CDC guidelines, “and am not sure how GrubHub (or any other business) could guarantee that they were.”

Tan agreed: “I don’t believe [third-party delivery services] can guarantee anything.” He thinks restaurants need to take control of the situation as much as they can, redesigning menus to offer simpler dishes that must be reheated, packaged in materials that require customers to transfer the food into microwave or oven-safe containers.

“It seems like the general rule is adapt or die,” said Diana Beshara, the co-owner of NYC’s Cantina Royal, who noted that even if her restaurant delivered to four times as many customers as usually dine in, it still wouldn’t be making the same amount of money as it was before the crisis.

Shawn Cirkiel, the chef and owner of several restaurants in Austin, Texas, said takeout and delivery are “a losing proposition.” “With takeout only,” he said, “you lose opportunities like appetizers, that second glass of wine.” Still, he’s kept the doors open. He’s following all of the guidelines, from taking staff temperatures as they walk in the door to having everyone wear gloves, to propping doors open. (And unlike most restaurateurs, he offers health insurance to his employees).

“You really just [offer delivery and takeout] so that your staff can be positive,” said Cirkiel. “So there’s something to feed people and hopefully there’s a few hours to continue to pay people.” He pointed to a food drive he ran last Sunday, March 22nd, at his restaurant Olive & June. Around 300 service-industry people came to pick up groceries for themselves and their families. “These are people who were in publications like Eater or Time Out Austin,” he said. “People who were culturally important.”

Not even NASCAR is taking chances with the health of its athletes and fans. The racing league announced last week that it will replace its marathon-length live events with 90-minute competitions with its marquee racers competing in “simulation-style” esports contests. This is the Rugby 7s of motorsports and we’re here for it.

The FIFA 2020 season, like the rest of sports, has been canceled. But that hasn’t stopped football fans from watching their heroes compete on a virtual pitch. More than 60,000 people tuned in to switch last week to watch Borja Iglesias for Real Betis and Sergio Reguilon for Sevilla compete head to head in lieu of their canceled derby.

Only one of America’s top five late-night talk show hosts has the courage, conviction, and wherewithal to keep filming their series in the plague era. And that host is Conan O’Brien who will be coming to America’s living rooms via his living room (and a Skype connection) in the coming weeks.

Given our newfound reliance on take-out and delivery orders, it would have been easy for DoorDash to continue enforcing its predatory 30 percent per order commissions. But the situation is so dire these days that the company has announced that it will forego up to $100 million in revenue over the next 30 days in order to give local restaurants a financial break. Such largesse.

I can’t think of a more clear-cut sign as to the seriousness of the coronavius outbreak than the fact that Apple unveiled its brand new $1000 MacBook Air model boasting a 12-hour battery life and i3 (upgradeable to i7) Intel chipsets last week and barely anybody even noticed.

DoorDash will also allow over 100,000 independent restaurants to join its subscription program for free, while existing partners will have their commission fees reduced. DashPass lets diners pay $10 a month to have delivery fees waived on orders over $15. In today’s world, that could be a good deal, both for consumers and for restaurants.

Restaurants don’t just pay hefty commission fees to companies like DoorDash and GrubHub — the delivery businesses also charge them for advertising and marketing purposes. DoorDash pledged up to $20 million in marketing funds to help independent restaurants generate more business in the coming weeks, in addition to the waived commission fees.

As coronavirus concerns grow in the US, more people may opt to stay at home and more independent and small businesses may face major financial impacts. Hopefully initiatives from companies like DoorDash will help to soften the blow.

A Lyft spokesperson also told Engadget that it had “decided to provide funds to drivers infected or quarantined by a public health authority.”

There may be broader industry plans afoot, however. Wall Street Journal sources say Uber, Lyft, DoorDash, Instacart and Postmates are among those discussing a fund to compensate drivers affected by the virus. The details of how it would work aren’t clear, but the group is reportedly poised to make a decision in the “coming days.”

While this could be good news for drivers worried that they might get sick, the payouts won’t fully address concerns about pay. Ridesharing drivers and couriers typically don’t make much money from their work, making them particularly sensitive to even brief interruptions — compensating them after the fact could still lead to financial hardship. They may be tempted to keep working even when they show symptoms of a possible infection. And of course, compensation for infections won’t offset lost business from declines in tourism and other customers staying home due to coronavirus concerns.

Rather than place all of the pickup orders on a crowded shelf, Chipotle will test walk-up windows and pick-up portals. The details are still vague, but Chipotle says the changes will make it easier for digital customers to receive their food.

You might see the new layouts popping up in Chicago, Cincinnati, Phoenix, San Diego and Newport Beach, California. Chipotle will tests its “evolved design” in new restaurants, including an urban storefront, a standalone restaurant with a Chipotlane and an end cap unit with a Chipotlane. It will also retrofit two existing locations.

With any luck, Chipotle will get its burrito-delivering drones flying in more places soon, too.

The US Bureau of Labor Statistics defines those providing their labor in the gig economy as “independent workers.” Their jobs range from day labor, seasonal workers, substitute teachers, or “Intermediate contractors who are self-employed but connect with clients through an online marketplace or other intermediary, which include drivers hired via peer-to-peer ridesharing apps.” Virtually all independent workers are considered self-employed and typically hired to perform short-term, discrete tasks. This system theoretically empowers workers more flexibility in when and how long they work while employers can better handle seasonal changes in labor demand without having to worry about providing benefits like healthcare.

The rise of the gig economy has also changed the relationship between workers and customers, specifically in the matter of tipping which puts more than $42 billion dollars of income into the pockets of workers in the American food service industry alone. Dr. Michael Lynn, professor of consumer behavior and marketing at the Cornell University School of Hotel Administration, points to five major motivations behind Americans’ traditional tipping practices.

“One is to repay reward servers for the work they do — reciprocity,” he told Engadget. “You’ve done a favor for me, I need to reciprocate. Here’s some money.” Lynn also points out that tipping big can help ensure better future service, especially if the customer expects to return regularly. Customers will also tip as a means of displaying social status by showing off their wealth with big tips, like the patron who ordered two waters and left a $10,000 tip at a North Carolina restaurant in 2018. Another reason is to help the server. “In many cases, people know servers make substandard wages, below the standard minimum wage,” Lynn continued, and will tip as a means of altruism. Finally, many Americans simply see it as a social obligation or duty to tip. Nobody wants to be seen by their peers as that cheapskate who left $0 on a $300 tab.

However, tipping only serves as a moderate motivator to wait staff. In a 2001 study, Lynn found that service quality accounts for less than 2 percent of tip amount variance. “There is in fact a weak relationship,” Lynn explained. “Tips are not strongly related to service.” That’s not to say that the only reason servers show up each shift is for the chance to take home tip money.

“They have to provide a certain level of service just to keep getting fired,” Lynn continued. “And many people will work in providing a good level of service because they take pride in their work. Tips aren’t the only motivations do a good job.”

But they sure help.

In a 2017 study, Lynn notes that the rise of the gig economy is associated with a decline in tipping norms, especially among the younger adults who constitute the largest user base of gig economy services. A subsequent 2018 NYT post found that while traditional cabbies enjoy customary tips in excess of 20 percent of the base fare, Uber drivers generally only get around 5 percent of their base fares. To be fair, Uber introduced its ride-hailing service in 2009 and spent the next eight years telling passengers not to tip their drivers, right up until the company introduced its tipping feature in 2017. So it’s not as though Uber customers have been socially primed to tip their drivers like they would a taxi, even though they were always free to give their driver a cash tip if they chose to.

In a study from the NBER, published earlier this month, a team of researchers from Stanford, UCSD and University of Chicago found some surprising contributing factors as to why that ride-hailing tip disparity exists. The study examined 40 million Uber trips conducted from August 18, 2017 through September 14, 2017. They found that only 16 percent of those trips ended with the driver getting a tip, and when they did, the average amount was $3.11 (around 26 percent of the fare).

Tips were typically highest (in both amount and frequency, $3.70 and 17 percent respectively), in the hours between 3 am and 5 am. That’s usually when business travellers are getting off red eye flights or getting to the airport to catch the day’s first plane out, and potentially expensing the ride to their company. Conversely, the study found that tips were lowest around midnight, earning drivers less than $3 on just 13 percent of their trips.

In addition to a driver’s ability — hard acceleration, breaking, and speeding were all found to be surefire ways to lose a potential tip. Their age, gender and ethnicity all played a role in how and how much extra they received. It should come as no surprise that younger female drivers are tipped at higher rates and amounts than their male colleagues, though that gap does close as the drivers’ ages increase. Yes, it’s for the same reason that Hollywood actresses stop getting cast after a certain age and how busty blonde waitresses consistently earn bigger tips than their less comely co-workers.

Interestingly, female passengers tip in both smaller amounts and a lower rates than male riders unless their trip is with a female driver. The study authors point out that “men tip female drivers nearly 12 percent more than they tip male drivers, while females tip female drivers roughly 11 percent more than they tip male drivers.”

“Our results indicate that gender matters when it comes to tipping,” the study authors concluded. “Gender also interacts with age, with men tipping younger women more than they tip any other group. We also show that tipping varies based on the demographic characteristics of where the rider and driver are from. As expected, we find that the quality of the ride matters as well, with higher quality generating higher tips.”

It’s not just Uber, the gig economy has also had an unexpected impact in the tipping norms of delivery drivers as well. A study out of MIT and Michigan State University this past May argues that because gig workers can work when they want and are paid per task, “market norms crowd out the internalized social tipping norms that compel some consumers to tip out of a sense of obligation or duty.” Additionally, knowing that gig workers don’t have to take a job if they don’t want to can depress a user’s willingness to tip.

Their study involved a pair of smaller studies; one using Foodler, which utilizes a restaurant’s own employees as delivery drivers; the other using GrubHub, which relies on third-party drivers.

For the Foodler test, the researchers ordered 115 times to the same Boston-area address over the course of five years, alternating between tipping up front and withholding tip until the food actually arrived. They found that, when withholding the tip, their orders arrived around seven minutes faster on average compared to tipping up front (38.77 minutes and 45.67 minutes, respectively). “We also found that when tips were provided upfront, drivers tended to deliver food faster when the tips were larger,” the study authors wrote, “despite seemingly not having any additional incentive to do so besides feelings of goodwill or reciprocity.”

“It suggests that tipping norms decline in the gig economy not because services are ordered online or over a smartphone app,” the authors concluded, “but because the workers have control over whether they work at that time.”

Conversely, GrubHub drivers are independent workers, not employees of the restaurant you ordered from. The researchers hypothesized that because GrubHub drivers only see a composite price on the delivery as a whole (that is, they don’t see how much tip is included, just the total), they “would be less likely to even notice tips in the first place, and the size of upfront tips would have little impact driver performance.”

Testing this involved 12 volunteers ordering 154 meals through the online service. The average delivery time across all orders was just under 40 minutes. Even when controlling for cuisine variety, order subtotal and distance from the restaurant, only distance showed a significant effect on delivery speed, adding 6 minutes per mile on average. “A simple regression of average time on tip percentage up front also found no effect,” the study authors wrote, “suggesting not only that the timing of tips did not matter, but also their size.”

It appears that hiding the tip amount from GrubHub drivers (who rarely receive tips once they arrive), motivates them to complete deliveries faster so as to complete more deliveries per shift. Restaurant delivery drivers have the opposite motivation (get more and bigger tips) and therefore prioritize some deliveries over others depending on who’s doing the ordering.

One way in which restaurant and GrubHub drivers are alike is in how their tips can impact their paychecks. In a number of states, restaurants can legally pay tipped workers less than the state and federal minimum wage because they make tips. It’s called the tip credit.

“Essentially, employers are allowed to credit some of the tips servers make toward their wages and pay them more wages as a result,” Lynn explained. The restaurant is still paying those workers a flat hourly wage, “it’s just lower than what the cooks are making.”

A number of gig economy companies, including Instacart and DoorDash, have until recently done the same. They’ll count the driver’s base pay and tips together to subsidize their own cost liability. So if the minimum hourly wage in a state is $15 but the driver’s base pay and tips only come out to $12, the company will cover the $3 shortfall. If however the driver’s base and tips for that hour exceed $15, the company only has to pay the base.

Lynn sees nothing wrong with this, so long as all parties are up front about the arrangement. “The idea that tips would supplement or replace wages, at least conceptually, that happens in restaurants all the time,” he said.

In DoorDash’s case, “the only real problem with it is that many consumers weren’t aware of the policy,” Lynn continued. Customers thought that they were helping their driver with their tips unaware that every extra dollar given reduced the wages the driver received. “And so, DoorDash was keeping money that customers thought they were giving to the server that was augmenting the servers income.” Unsurprisingly, public reaction to this revelation was fierce and negative, prompting the company’s CEO, Tony Xu to tweet:

1/ After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible.

— Tony Xu (@t_xu) July 24, 2019

“There’s nothing wrong with that if everybody knows that up front. The employees knew it up front, they signed a contract, but the customer, in many cases, didn’t know that. And so, arguably DoorDash could have, should have, done more to communicate their compensation policy to consumers. As long as everybody knows about it, what’s the harm?”

Images: Getty Images (Uber); graph (NBER)