Service workers left in the lurch as Americans cut back on tipping

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Tipping has been essential in the US for generations, but it’s becoming increasingly rare to leave a few $1 bills out on the table – now when we pay for an Uber, buy a coffee or order takeout, a screen demands to know how much we want to tip, putting the ethical decision into clear focus. Thirty per cent? Twenty per cent? A measly 15%? Would anyone dare go lower than that?

Before the pandemic, Carlos Tavares says, he got as much as $75 in tips a week driving his gray Toyota Camry for Uber – nothing life-changing, but a nice bonus after working long shifts in New York City. Now that’s fallen sharply, he says, to $20 to $30 a week. “I don’t really know why,” he says. “Maybe people are just trying to save money.”

At the Poetica Coffee Shop, a chain of cozy cafes in Brooklyn, customers have been pulling back as well. Though nine out of 10 customers leave a tip, they’re giving less than before, says Parviz Mukhamadkulov, the company’s CEO and founder. “During the peak of Covid,” from May 2020 until June 2021, “customers used to tip an average of 50% of the total amount. Everybody felt a need to support small businesses and local baristas that they knew. It has since then dropped to 15%.”

When economic distress hits, tips are usually the first thing to goHildalyn Colón Hernández, Los Deliveristas Unidos

New research reflects this more miserly tipping trend, as the urgency of the pandemic fades and the pressures of inflation rise. According to a survey released last month by Popmenu, 43% of consumers say they tip their servers at least 20% of the check, down from 56% of consumers who did the same last year. Thirty-two per cent of people reported tipping delivery workers 20% of their order, down from 38% a year ago.

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Tipping service workers is a longstanding American social norm – one that comes with obvious risks: it can play into racism and sexism, and it puts workers at risk of wage theft. But while some US restaurants have tried to eliminate tipping, many have backtracked when earnings decreased for workers and the business.

Business owners say tipping is often an emotional response; studies have shown tips tend to increase during the holidays. Mukhamadkulov says Poetica Coffee recently saw an increase in tips after their baristas – some of whom are Ukrainian – hosted a donation drive to support the people of Ukraine.

View image in fullscreenTipping norms vary widely from one industry to another, even if the effort involved is similar. Photograph: Catherine McQueen/Getty Images

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But tipping norms also diverge greatly from one industry to another, even if the effort involved is comparable. Data collected in 2021 by Driver’s Seat, a gig worker-focused platform, found that while 85.8% of customers tip for food delivery, only 24.8% do the same for Uber and Lyft drivers. And a survey in October by PlayUSA found that while 98% of restaurant workers receive tips, only 39% of coffee shop workers do.

That’s frustrating for Tiana, an employee at a recently opened counter-service cafe that sells boba and freshly made sandwiches in the celebrity-studded neighborhood of Brooklyn Heights. She says that only about a third of her customers leave a tip because they don’t see it as a tipping establishment. “I guess it’s how the rich stay rich,” she says.

Mimo Guzman, a 28-year-old barista who works a few blocks away, says she watched tips nosedive at her previous employer, a busy Starbucks in Manhattan, after the height of the pandemic. Thankfully, her current employer, Blank Street, offers a wage guarantee: the base pay is $16.50, but if the tips don’t add up to $23 then the company makes up the difference. “You can’t get by on minimum wage, not in this job. We depend on tips,” says her colleague, 20-year-old Masena Sadeghi.

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The same applies to delivery workers, who are largely dependent on tips to survive. Gustavo Ajche, the founder of Los Deliveristas Unidos, a New York-based labor group, says that in a good 12-hour workday on DoorDash, he might make $250. But out of that sum, almost $200 of it might be from tips. Even then, Ajche suspects that “they don’t give us the real amount”: in 2020 DoorDash admitted to using customer tips to subsidize workers’ base pay. Though the company claims it has ended that practice, Ajche says he still sees strange discrepancies between the earnings the app promises and what he takes home.

Gig companies’ lack of transparency also affects rideshare workers. Nicole Moore, an LA-based Uber driver and organizer at the Rideshare Drivers United labor group, says platforms like Uber have been price-gouging passengers without passing additional earnings on to drivers. “Because the passengers are paying such high fares, they don’t think the drivers need tips,” she said. “But in fact drivers’ earnings are even lower than they used to be.” A study commissioned by the labor group found that after accounting for the costs of doing business, rideshare workers in California take home just $6.20 an hour.

That’s why gig workers are pushing for wage guarantees. The New York City council recently proposed a first-of-its-kind minimum wage for delivery workers of $23.82 an hour, excluding tips – though Los Deliveristas Unidos has asked for $5 more to cover the cost of their electric bikes, safety gear and the risk of injury. It’s also a hedge against unpredictable customer behavior: “When economic distress hits, tips are usually the first thing to go,” says Hildalyn Colón Hernández, the group’s policy director. “That’s why tips cannot be the income for these workers.”

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But there’s at least one group of Americans who are determined to continue tipping well: tipped workers themselves. Tiana, the cafe worker, says she’s recently started bumping up the tips she leaves whenever she makes a purchase – even if it’s just takeout. She says it’s simple: “I know what it’s like on the other side.”

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