« The Weeds

Those pesky delivery fees

2024-05-22

Pretty much everyone is unhappy with food delivery these days. Prices are rising for customers; workers are barely making minimum wage; and restaurants feel gauged by delivery apps. Today on The Weeds: how the gig economy turned sour, and how you can still order your favorite food without feeling guilty. Vox senior reporter Whizy Kim explains.

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Food delivery fees have soared. How much of it goes to workers? 

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
A new social media campaign is targeting celebrities who haven't spoken out against what's happening in Gaza. But is it working? The sort of block out movement is a lot more about the shifting attitudes towards celebrities than it is about really achieving anything because yes, Kim Kardashian has lost followers and there are some cases where celebrities are seeing a dent, but I think this movement misunderstands how traditional celebrities make most of their money. I'm Taylor Lorenz and we'll be talking about the celebrity block out this week on Power User. I think we can all agree the current political moment is fraud, but how does it go? compared to the other fraught political moments in history. Everything was falling apart. Young people against old people, anti-war violence, peace movement. I'm former U.S. Attorney Preet Bharara, and this week...
Presidential historian Doris Kearns Goodwin joins me on my podcast, Stay Tuned with Preet. We talk about difficult times in America's history and how its people overcame them. The episode is out now. Search and follow Stay Tuned with Preet wherever you get your podcasts. - Hey, it's John Glenn. And before we dive in today's episode, I wanted to give you a heads up About some big changes coming to this feed. I'm so excited to share more details with you. And I will, next week. So if you haven't already, make sure you're following the show and you'll be among the first to know the news. Until then, here's the show. Is that there's basically an app for everything right now. You can use an app to find a car, find a job, and even find a date.
We get to fix things around the house, get our groceries, get ourselves a little treat. They make ordering things and services really easy, low interaction. And it's really kind of changed the way we consume things because it's so easy to do with the click of a few buttons on your phone. Getting those things adds up. Delivery fees, service fees, which are somehow a different thing from the delivery fee, and of course, giving a healthy tip on top of that. Have you ever stopped to wonder where all that money goes? My name is Wizzie Kim and I write about all things money for Vox.com. Wizzy recently wrote an article about why these apps are expensive and who exactly is making money on them. Spoiler alert, it's not the person dropping off your
A Sabria tacos or the restaurant making them. But first I have to ask her something. This is a safe space. Do you have any like guilty delivery stories where you're like, I could have gone and gotten that. - Oh yeah, all the time. I am notoriously bad at. Making the mental calculus of, hmm, I could just walk and go pick it up, versus let me just order it on my little phone. But I will say, honestly, I have tried to make more of an effort since. The gig economy and these food delivery, especially, food delivery apps, and I've tried to order less through it, but it's definitely just so easy to fall victim to how easy it is. - Yeah, I think the one that I'm most ashamed of
One time I was getting ready to go away on a long weekend with some friends, like, you know, maybe like twice a year, once a year, either in the spring or the fall, a bunch of us will be like, you know, what if we rent a cabin in Shenandoah, go hiking, hang out in the hot tub, grill, get away from the city a little bit. And you know, we had this big grocery list. I was in charge of bringing a very specific loaf of bread and the bakery is like walking distance from my home, like maybe like either one or two minutes, but my friends were coming to pick me up soon. Like everything was very hectic and I admittedly ordered the bread to be delivered to my front desk so I could bring it on the way out as I was getting ready for the trip. You know what, I don't think you deserve any judgment for that. Understand that sometimes you just, it's not even about the physical capacity to do it. So kind of overwhelmed by all this other stuff you have to do. You're like, it would be so nice if someone could just have it.
Appear on my desk for me. - Yes, I'm like, can you deliver the food directly to my mouth please, instead of going? So when did this part of the economy start to gain traction and popularity in the first place? Like, how did this happen? I would really say from the late 2000s, early 2010s is when we all started really noticing sing these apps and talking about them. I mean, I remember being like a junior or senior in college and using Seamless for the first time. Being lazy but you know wanting food conveniently delivered to me. And since then I think it's just grown in popularity especially. The pandemic or during the pandemic and afterwards too. Anyone who's used these apps knows that they have a ton of fees.
Do we know where all of that money is going? - That's the really hard part. We don't really know. I mean, there are like the delivery fees, the service fees, whatever that means. And it's kind of purposely left opaque. The service fees just say something like that they help cover operational fees, which could mean a bunch of things that could help pay for servers, that could help pay for just customer service, and that could also help partly pay for delivery workers, but they never really break it down. - Yeah, it is very curious because, you know, and service free and I'm like, oh, is that not the same? And I also see delivery fee and I just assume like, oh, that must be part of what goes to the driver. - I mean, I'm not 100% sure on this, but it does seem like the delivery fee is something that might go towards helping the restaurant cover.
Delivery fees because sometimes the restaurant itself sends an employee to deliver the food rather than a gig worker, right? But sometimes it's about kind of setting a fee to offset maybe the fees that the restaurants themselves have to pay, DoorDash or Uber Eats or GrubHub, whatever it may be. The service fee is something that goes toward the app and maybe a little bit toward workers and we don't know. So something I think about a lot is how in my early 20s, my life was essentially kind of funded by angel investors. You know, I was taking ride shares, I would use delivery apps, all kinds of stuff. And my first job out of college. That I was required to have a college degree for literally paid me $12 an hour. But despite the fact that I was not getting paid a livable wage, I was able to grab a car at a pretty reasonable
price when I needed to be in that newsroom at four in the morning. But that money has dried up and the prices have gone up so much. Like what used to be a $5 ride is now a $20 ride. Are these apps prof? Are they making money from this? Technically, not really profitable. At least they're not posting profits on their like year-end, you know, annual financial That doesn't mean that they're not raking in money though. So last year Uber's delivery segment was profitable. But Uber overall was profitable for kind of the first time in forever after posting. For so many years. And the fact that in many years food delivery apps lose money wasn't because they weren't making money or the cost of operations was just too high. Often these delivery apps would take their revenue.
And spend aggressively on marketing, on advertising, on R&D. On basically increasing their market share and just growing the business, which is. With a lot of these VC-funded, you know, ad companies that we know and love today. I'm not making money because they're intensely popular with people. It's just that they would rather spend that money on kind of future looking investments, I guess. That makes sense. Well, I mean, I understand what you're saying. Not necessarily that the business model makes sense. So one of the reasons people... Use these apps. It's for convenience, you know, you're at the office and so you need a dog walker. Your dog or you know you're not that handy. I had to call a task rabbit to come and put my new bed together because if I had put it together I would
Floor right now. Or you know, you're occupied at home, you got a lot going on, you have kids and you need to get groceries. So you have them delivered. And these are things people were at times paid to do before the dawn of the gig economy. I'm wondering if there is a way to decouple, you know, these services from the apps from the gig. Economy. I agree that it's so hard to like imagine that right now because we've grown so used to the apps. But as you pointed out, we've had these services before the app. So I think there must be a way to have them without this exact structure in place, a structure in which the workers like doing the actual work get paid so little. I think that it is absolutely.
Possible for us to decouple them, even if I don't have the answer for exactly how that should work right now. I think we do need to kind of look at the way it works right now and ask ourselves, like, is this sustainable? You know, is this sustainable for the workers, for the customers, for the apps? I mean, I guess they love it because they can pay the workers less and make a lot of money. But yeah, I do think it's possible to decouple them. So I think as we're talking about the gig economy and its pitfalls, we also have to acknowledge that part of this is about accessibility. You know, some people just aren't able to go to the grocery store or go pick up food. And this does, I think, make it a little bit more complicated. Does open a whole world for them, and they need those options in order to get access to things that other people have, how can we go about getting the best of both worlds? Fulfilling these needs.
Helping with the inconvenience and also, you know, making sure people are paid a fair wage. Yeah, there are many good reasons why people would need a service like what the apps provide. And I don't think it's an individual's cross to bear, you know, it's It's good that more people know about the labor practices of the gig at companies. But you know, I'm not sure that shaving a person who really would like their food delivered because of XYZ reason or needs it delivered, I don't think that's fruitful necessarily. And I don't know how many people Will be deterred by that shaming anyway. And I think that the fact that these delivery apps cost so much now is starting this conversation of. What's going on, right? You know, why is it so expensive? And then you sort of get into, well, it's expensive because they charge fees, but those fees may not necessarily be going to workers. So I think there's absolutely a way for our society to provide more support.
People who have disabilities who need help getting their food delivered to their doorstep, but these apps have not been... Providing a solution that is affordable to people anyway. Already not working. So, you know, something better is needed, I think. - All right, we're going to take a quick break and. We'll be back in 30 minutes or less. It's gonna be less. Michael Cohen, Trump's former attorney, fixer and friend, testified this week in Manhattan. Blanche is upset because he knows that he looks like a fool right now representing Donald Trump. The stupidest opening to a cross-examination I have ever heard, and I have heard a lot of stupid stuff. I'm Preet Bharara, and this week, Katie Fand—
host of MSNBC's The Katie Fang Show, joins me on my podcast Stay Tuned with Preet to talk about the latest court news from Trump's trial. The episode is out now. Search and follow Stay Tuned with Preet wherever you get your podcasts. Sebastian Younger is a writer and a veteran journalist who never believed in the afterlife. But a near-death experience forced him to question what he thought he knew. Maybe we don't understand everything in scientific terms. Maybe there is something missing here. That is very significant about how reality works, how life and death work, what consciousness is, and ultimately what the universe is. - Hear more this week on The Gray Area, available wherever you get your podcasts. And I'm at Elson and we're the hosts the co-hosts. It's kind of unfair to call it
co-host. I'm really the host. He's my Robin Givens. Let's just be clear on what this is. But anyways, we're the hosts of Prodigy Markets, your go-to podcast for all things money. Every Monday, we provide brash, unfiltered analysis on market moving news, high-flying... Stocks, growing sectors, stupid boardroom decisions, and master of the universe CEOs. - You wanna understand money and how you can get more of it, you have to talk about money and we're here to help you do that. Follow Profity Markets on YouTube or wherever you get your podcasts to automatically receive new episodes every Monday and every Thursday. - That's right, the good news is we know how to get your economic security, the bad news is the answer is.
Slowly. We'll tell you how on ProbTee Markets. ♪ Lifetime ♪ - Okay, Wizzi, how does the relationship between gig apps and the stores and restaurants
Like, how, what is that arrangement? What does the money look like? How do they communicate with one another? Like, what's going on there? - Restaurants feel like they have to be on these delivery platforms, or else they're not going to be competitive. So it's, of course, always a choice to be listed on DoorDash or Grubhub or Uber Eats. But many restaurants make that choice and pay kind of a hefty commission because otherwise they feel like their sales will go up. Their sales will go way down. So they can pay anywhere from between 15% to even 30% of an order, value, and commission to-- The apps. So it's a significant amount. The exact amount depends on how much sort of marketing that the app will do for you. You know, basically how central you might be to their platform. You know, if you open the app, are you going to be one of the first few restaurants that...
That people see. - Oh, so people are paying, like when I open the app and it's like local favorites. Blah, blah, blah. That is, that's a little... Well, it's not like a one-to-one thing where like, here, let me slip you a few extra dollars and I'm going to be front page. But there's definitely a relationship between how much promotion you get on the apps and like what tier of a marketing package you've selected with an app like Dorta. So if you select the higher tier, you're just going to get more service from the apps. And if you pay a lower tier than Not so much. - Mm, that makes sense. - What that means essentially is that restaurants will often try to pass off at least some of their costs, some of their commission. By making the menu items more expensive, right? So that's why if you go to a Chipotle walk-in in person, you're gonna see one price. If you try to order on an app, it's just going to be more expensive before all the fees and tip and whatever. That makes sense. So that's how you know you're tip
Cole Walken order goes from like $30 to like $55 for the delivery before tip. - Exactly, yeah. - How much of what delivery folks are getting paid is from tips? Is that like the majority? Of the money they're making? - So, I mean, we all know that there are so many fees ordering from these apps now, right? There's a service fee, and then there's just inflation also, like food is more expensive. But also both New York City and Seattle recently passed-- minimum pay laws for drivers, for delivery workers. And that came with an additional regulatory fee in these two cities. - Regulatory response fee added to their orders and in New York City, it's an extra 199 on both DoorDash and Uber Eats. Doesn't add a regulatory fee, but they do still charge a service fee that can
Like very widely depending on your order size. So there are all these fees. Well, you know, maybe because the new pay law, this extra regulatory fee is going to the drivers, but we have Very little evidence of that actually happening or this extra fee being needed to pay these workers. New minimum wage law because again the fees are very opaque. Meanwhile, from past data and research we know that workers on these platforms typically make less than minimum wage. There was a... Delivery workers advocacy group in Seattle based in Washington state that kind of did a campaign a few years ago showing that a lot of orders delivery workers would make just a few bucks and Sometimes even they would talk about feeling like they were paying to deliver because if you only get a few dollars for each
and you're paying for fuel, you're coming out at a loss. So it really just was not workable at all for these workers to keep on going this way. And in New York City, it was pretty much the same. About half of their earnings came from customer tips. How was the consumer response been to regulation? Consumer response has been mixed, I think. Of people do agree that these workers deserve to be paid more, but understandably they get a lot of sticker shock from just seeing how much their order costs. So it's a lot of confusion. It's a lot of, Well, is this really what we're looking for? what it means if workers get paid minimum wage. Does that mean that I'm going to be having to pay, you know? $50, $70 for a reasonable delivery order, that's not going to work for me. And I think that's to the app's advantage, right? If they can sow this sort of confusion and say, Hey, it's not us.
It's not our fault. These city governments are making us pay workers too much. That's why your costs have gone up. So sorry. You know, and it's unfortunately a sort of narrative that has worked in terms of government's response. So in Seattle, they're already voting to roll back some of these new pay law provisions. Well, I should clarify, they voted to lower the minimum wage now from 26... Almost $27 an hour to now about $20 an hour, which, you know, you hear $27 an hour and you think, Hey, that's not a bad hourly pay, right? But again, keep in mind they have to pay for all their expenses. They have to get their own health insurance. They don't get benefits like workers comp that, you know, an employee would be entitled to. So there's a lot of out-of-pocket costs that drivers are paying for themselves.
- My favorite Thai restaurant isn't that far from me. And you know, I place orders there all the time when takeout is in the budget. And what I do is I'll place the order on one of these apps for pickup. Does that make a difference at all? And by doing that, am I taking money out of the hand of like a delivery person? Like, am I doing right by the restaurant? Like, is that how I should be going about this? Like, what does that do? - Unfortunately for pickup, the app still gets some money from that. get some money from that. Do get some commission from restaurants because the logic is that by being listed on our platform, we make it so much easier for our customer to find you. So even if it's a pickup order, we helped connect you with that customer so we got a cut. So the way to try to completely cut out the apps from the process would be to call the restaurant yourself or just call
Sometimes they have their own ordering platform maybe online. I mean, this is much rare. Most of the time you just have to pick up the phone and call them. Yeah. I don't know if you've seen this, but... I've been seeing more and more restaurants, if I order from them using like DoorDash, On the order bag, they'll say, Hey, just go to our website next time and call us. It's much cheaper for us. It'll be cheaper for you, that kind of thing. So they're sort of advertising that you should not use the delivery apps themselves. - That's so interesting because it's like, you know, that's what we did before apps. It's like you call Domino's, you call your local Chinese spot, and you're like, Hey. Can you deliver this? They're like, hey, can I pick it up? And it's like, oh, we're getting analog again. Okay, I'm gonna take a step backwards and ask you to go through those Seattle and New York City laws that have recently passed to address gig workers. What did they pass and how are they trying to address the problem of rising?
Prices. I mean, honestly, I don't know that it does too much to address the rising prices for consumers because these laws don't crack down on what kinds of fees that the delivery apps can charge. Makers may kind of cluck their tongues at them and say, hey, stop doing that, but there's no real enforcement behind it. It is, however, just a pay threshold to try to protect these workers a little bit more. And I will say, like, the way the pay works is kind of complicated. But it's supposed to work out to about $19.56 per hour. You get paid for your deliveries, and you might get an adjustment pay later so that you're topped up to at least that hourly amount. Seattle does it slightly differently. They do a minimum per minute pay, and it was supposed to be $0.44.
Per minute and a minimum like per mile amount of 74 cents. That's now maybe getting reduced after the city council voted to lower it, but that's how it worked out. Basically, it's supposed to pay for your delivery time. So when you accept an order to the minute that you hand it over to the customer, right? And part of the reason why advocates wanted the minimum pay to be as high as possible and higher than the official city minimum pay is again expenses, but also because a significant portion of the time when you're working as a delivery worker is being logged on to the app, waiting for an order to come through. I mean, that might be, you know, if you're an employee somewhere, it might be sort of a lull, but you're still at work, right? You're still waiting around for a customer to come. It's not like you can go off and do whatever you want. But you know, that time is just your own time. You're not getting paid for that.
That's kind of why, again, the working time for a lot of these delivery workers is often underestimated because of all of that. Some of these cities have moved to regular. Their gig economies and you know the results have been mixed but you know Senators Elizabeth Warren, Bob Casey, and Ben Ray Lujan sent letters to UberEats and DoorDash asking for more transparency about all these fees. Do you think that letter will have any impact? Do you think that's creating like a bigger conversation or is it just sort of like Okay, business as usual. I think that it's definitely good anytime that lawmakers scrutinize corporations and ask them questions, even if they don't end up providing the most satisfying answers. It does sort of Ratchet up the tension a little bit and show that someone at least is paying attention and wanting answers. As far as
As I'm aware, I don't know any public information from the maps that came out of that letter, but I think it's absolutely good that, you know, senators... Warren, Luhan, and Casey were kind of like, Hey, these are junk fees. You know, they came out and said it. They were like, you know, you're basically price gouging consumers. And the fact that we are calling it these things also helps shift the conversation. From, Oh, this is just how it works normally, to, Actually, this is not right, and we shouldn't have to pay these fees, especially when we don't even know where the money's going. - I get that same feeling I get when, you know, I'm trying to buy a ticket on Ticketmaster, where it's just like, Why is everything so expensive, and where is this money going? And I don't know. It's just, I just wonder, like, is there any escape?
Like something has got to give, but it feels like nothing is giving. - I think this is definitely the start. I agree that we need more to happen. We need, you know. More support from people in power, hopefully, to both crack down on some of these egregious fees, Have a better idea of why they're charging these fees. I mean, we sort of know the answer because they wanna make money, but. If you laid out more clearly where exactly every cent was going to, would we still feel that the good convenience of these ass was? Worth it as much as we feel now, you know? And I think that's why transparency helps because it makes us make better decisions just personally.
And there's no reason why anyone should don't want that. You know, the apps too should want us to make those decisions fully informed. But we don't get that privilege right now. When we're back, the workers keeping the gig economy going. When was the last time you noticed a federal comment period? You know the type. Federal government is passing a law or changing a rule and they want to hear what you think about it. Well, one of those comment periods just kicked off and runs for the next two months. And it's a big one. The federal government wants to know what you think about their plan to reschedule marijuana. Not what time you take your smoke breaks--
Sorry I'm late, it's just like this new schedule is totally confusing. The federal government is basically trying to recategorize weed and... It could happen as soon as Election Day. The president says it's a big deal. This is monumental. To a cannabis policy reporter at Politico to ask if she thought it was monumental. And she said yes, but also no. Our conversation is waiting for you at Today Explained. This week on The Pitch, we're back to pitches. And this one's coming from my job. What Podcast.ai does is it lets podcast producers become 10 times more productive. How much are you charging the pitch? We're charging $99 and Josh came in right before we doubled our prices. - Mm. - Mm. - What's keeping something like a restream from--
Going like, yep, we do all this AI Now stuff too. - So there's a lot of these older companies that are tacking on AI. And that's kind of the issue they're tacking it on. You built this really quickly. What's to stop anybody else from doing this? - So what's the moat? - How do you build a moat when you're building with AI? That's this week on The Pitch. Go right now and subscribe to The Pitch wherever you listen to podcasts. - There are these laws passing on the local level and these companies are unsurprisingly not fans of them. Their counterargument is that they're actually bad. For workers. What is the argument that they're making? - Well, this is not a new argument at all, but many of these gig app companies have...
Have long said any kind of regulation, whether it's a pay law or some kind of labor law, just protecting working conditions, they-- Argue that it limits worker flexibility. Oh, these people work for us, deliver for us, drive for us because they're sort of. Entrepreneurs enjoying their side hustle and you're imposing restrictions on them. That's just been the line of argument for so long. So they say one, you're reducing flexibility because now in cities like Seattle In New York, workers have less say in how long they can work a shift. So what's been happening is, apps say that because demand for orders has gone down so much, which again, that's what they claim.
Haven't necessarily seen the evidence for it yet, I would say. But they claim that orders have gone down as much as 30% in some cases. So that just means that workers don't have as many orders. So they can't work as long. At work a few hours and then, you know, they see nothing, nothing coming their way so they have to stop. So they're getting paid less. Overall, even though they now have a minimum pay law in place. Like, restaurants hate it because they're getting fewer orders, workers hate it because they're getting fewer orders. And the only way to solve this crater demand problem is to repeal the minimum wage, roll it back, and then they can lift the extra regulatory fees. And customers will see that it's now cheaper again and come back to ordering, which I mean, I don't know. I really bought because it was already expensive before the extra $5 fee or $2 fee. That's not really the core of the issue. I keep thinking of when Prop 22 was on the back.
In California. Can you tell us a little bit about that? And also, like, do you think we're going to see more statewide initiatives when it comes to gig workers? I think so. I think that we are definitely going to see more states address this issue. Of the gig economy because it has been going on for so long now. And it's just a significant part of working people who aren't getting the protection and the pay that they deserve that other workers get, you know, at least in theory. And Prop 22 in California was such an absurd kind of moment, I would say, because it was a law that the app company...
That Uber, Lyft, these other delivery companies, they wanted this to pass. They were advocating for it. They spent so much money trying to get it passed, and it did. And they said, If this law doesn't pass, we might leave this state altogether. We might just not operate here. If this law doesn't pass, prices for consumers are going to rise. There are all these threads about this awful world that would exist if this law didn't pass. It passed. Fees still went up for customers. I mean, they, in some cases, might have made slightly more money, but... Again, a lot of them are still making under minimum wage. The real point of the law was to protect the gig app company's right to basically misclassify the —
workers forever and keep calling them independent contractors, which means that they're sort of their own boss, you know? They filed their sort of like freelance tax return and... Withhold their own taxes and they're not beholden to an employee is the theory. Except that they are, right? Because when you work on these app companies, you don't get too much control over how you work. A right or an order and you sort of have to take the directions they give you. If you take too long, you might get dinged for that. It is very much like an employee-employer relationship except that- In California allowed the app companies to say, We're not their employer. We don't have the obligations that employers have. So this was a major win for them, for the app companies, and a major blow to workers. - I just think of the fact that so many people are...
Independent contractors now, like years ago, I don't know if you remember this, but there was a period of time when there was a stripper strike in New York. - Oh yeah. - And like my dream of dreams, Story really badly is to like, to look at strippers and kind of how they are a microcosm of a lot of like the economic stuff and like worker rights stuff going on in the country. They like, pay for the pole, they have to pay for their outfits, the makeup, and it's like, what do you do? when you're an independent contractor and your employer is a bad actor, like what recourse do you have? Yeah, no, you don't have much protecting you because at the end of the day, they can just say, well you're not our employee. It's not like you can file some kind of labor complaint necessarily because again you're not in a The employer-employee relationship comes with a lot of obligations.
From the employer side, right? One of the things, for example, that was a big deal with Uber for a long time was they basically didn't have to pay into unemployment insurance, which is like a fund that other employers have to pay. Workers found themselves unemployed during the pandemic, during lockdowns, they might still get unemployment benefits through the state or whatever, but it wasn't something that their employer had paid into. So these app companies really save a lot of money in terms of like just employment costs and not just the hourly pay, but a whole host of other benefits. That employers were supposed to give. And so when they say that, you know, this is so unfair, personally, if I were... A business owner in another industry, I would look at them and think, That's not fair that I have... To pay all these employment costs. And you guys don't, and haven't had to in like the decade plus that you've existed.
Do you foresee any viable fixes or solutions to these high delivery prices and the inadequate pay? Or, you know, are we just, is this just, is this it? You know, experts do say that delivery ops don't have to keep raising their fees like this, you know? that they could still make money without charging an arm and a leg. So I definitely see A world where food getting conveniently delivered to your doorstep doesn't cost quite so much. But you know at the end of... Day if we agree that like minimum wage is a good thing that protects workers. Then we can't allow a certain subset of workers to not get that right. Like that has to change. It's already gone on long enough. So with that in mind, who needs to sort of change their work structure, their business model, right?
The app companies have to figure out, okay, how do we both pay our workers what they deserve to get paid while not turning off our customers? Like that's the fundamental issue. That every company has to deal with if they want to survive, right? So I totally understand customers feeling the pain of just how much it costs, but I would argue it's the biggest problem for the app companies figuring out how to survive in a way. That's increasingly looking at them and saying, Hey, you're charging all these fees. You're still not paying workers well. So what's going to give? They have to figure that out. At the end of the piece, you wrote about delivery fees. Some really great questions that I would love to like, pose back to you. And you know, you said, abs don't deliver faster. It's obviously not cheaper and the food is not magically better. So who benefits from their existence? What do they really add to the tangle of relationships? We call the economy. Um, yeah.
Who's benefiting from this? - I mean, I think the apps are. They have been for a long time. The executives of these app companies are really. They're really doing well, right? They're rich men now. And not only that, just any of the... The shareholders of these app companies, they're doing well. We talked about earlier whether these apps are profitable or not and where they spend their money. A lot of their revenue, especially in recent years, have gone to stock buybacks, which are a move that, you know, companies use. They buy by Their own stocks from the public stock market. And by doing that, there are less shares available for other people to buy, right? And that means the value of each individual stock goes up. So they become richer because just the value of every stock they own.
Goes up. And that kind of shows you the mentality I think that they have, which is, you know, it's money-making for them, it's been a good business for them, it's Them. And meanwhile, the rest of us are sort of wondering, yeah, like, is this worth it for me? You know, I could still pick up the phone and order the food, you know? Mm. But still do that. It might be a little more work for me. It might be, you know, just a little more labor for me, I guess, but at the end of the day, the service itself is probably not gonna be, be meaningfully different, right? So it just makes me question, if this thing is not obviously a necessary thing for me, providing a necessary service, then who should be worried by that? And I just think at the end of the day, the apps probably should be. - So, okay, if you are.
Just like a person listening at home and you're like, dang, I want people to be paid fairly. I want to live in a more equitable world, but also I really need those tacos delivered. How should they go about that? Like what is the best course of action? - So again, I don't think the right move is to feel like, oh, I can never use these apps again. Do use them and you are even remotely able to just tip as much as you can. I know it's been repeated by so many people but it truly is the biggest thing you can do as an individual. Consumer. Even if you're in Seattle and New York City, which do have minimum pay laws now, they're somewhat more protected. But still, it's not that much at the end of the day when accounting
And as I said earlier, before these new pay laws, half of New York City's delivery workers, half of their pay was coming from tips anyway. So if that suddenly went down because of these new pay laws, that would still affect their bottom. These studies from the government, from the city, were done under the assumption that customer tips would pretty much remain the same. So please tip as much as you can. And I try to think of it like, you know, how much would I take to deliver something? One's food order. - Yeah. - You know, like would I do it for $10? Would I do it for 20? You know, like what amount would feel like enough for me to get up. And physically move and deliver someone's food for them. I don't think that's exactly an easy thing to do, right? So it's also a very dangerous job, unfortunately.
New York City has extremely high injury rates. So I think just giving as much as you can to the workers. Wizzy Kim, thank you so much for joining us on The Weeds. - Thank you. - That's all for us today. Joining me. Our producer, Sophie Lalonde, Krishna Yala engineered this episode. Special shout out this week to our fact checker, Melissa Hirsch. Our editorial director is A.M. Hall and I'm your host, John Quillen Hill. This show is part of Vox. Support Vox's journalism by joining our membership program today. Go to vox.com/members to sign up.
Transcript generated on 2024-05-23.