Algorithms are cutting your food delivery drivers’ pay

Illustration for article titled Algorithms are cutting your food delivery drivers’ pay
Photo: Vadym Petrochenko (iStock)

It’s snowing in Chicago right now. It’s not even the first snow of the year. With such unseasonable weather comes full-body paralysis at the thought of leaving one’s home, even for food. But before you open your delivery app of choice—Instacart, Postmates, DoorDash, FreshDirect, Uber Eats—let’s talk about how your drivers have made less and less money over the past year or so.

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Here’s the deal: Food delivery drivers’ pay is determined by each company’s payment algorithm. Those algorithms weigh factors like order size (number of items and weight), driver availability, and driving distance. The way those factors are used by the algorithm to calculate the driver’s payment, though, is extremely opaque. So opaque that when the tech companies make small changes to their payment algorithm, it doesn’t raise any red flags in the moment.

“The changes are subtle—they’re small steps, so you kind of accept them,” Ulysses Galves told The Washington Post. Galves, an Iraq War veteran, drives for both Instacart and Postmates. “You lose a little money here and there—and after a while you realize you’re making half of what you used to.” Galves made over $700 per week driving for Instacart last year. Now, it’s around $400 per week, pre-tax.

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Erin Hatton, a University at Buffalo professor who studies labor issues, told the Post, “This technology—which could easily be used to increase transparency—is actually being used to do the opposite.”

According to the Post, these companies are essentially making up a new business model as they go along. So, sure, it’s reasonable for their brand-new model to be tweaked and improved over time. But these companies recruited good workers, cultivated a strong labor base, and now they’re reducing worker pay to make the companies appear more profitable. (DoorDash and Instacart are prepping to go public, which is likely to exacerbate the issue.)

What does this mean for you, delivery app user? Tip your drivers big. Think of a number, then add 10%. And tip them in cash, if you’re able.

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DISCUSSION

I’m sorry but the answer isn’t always “tip bigger”. All these “disruptive” businesses are premised on the same pyramid-scheme concept; use buckets of VC money to undercut an existing service or business and then gradually and incrementally screw everyone who uses or works for the service to build up a false impression of profitability and then sell the business to the dumb masses via an IPO so those at the top walk out billionaires. The model is starting to crack now as we see the share prices of recent IPOs falter and some *cough we don’t work cough* getting pulled because lo and behold even the dumb masses eventually catch on.

Here’s another option. Don’t use services like these unless you really, truly have no choice. The predatory ones will disappear on their own.