C8 THE BULLETIN • SUNDAY, JANUARY 10, 2021
Grubhub drivers say app change eats into
tips, jeopardizing a usually generous season
BY SUHAUNA HUSSAIN
Los Angeles Times
A recent tweak to the food
delivery app Grubhub that
changes the way customers
are prompted to tip delivery
drivers has frustrated many
workers, who say the change
discourages tipping and is
slashing their potential earn-
ings.
Popular food-delivery apps
typically allow customers to tip
drivers a percentage of their
meal’s cost, with the default
tip often ranging from 10% to
25%. Grubhub switched from
that model Dec. 16 when the
Chicago company rolled out
new fees for customers in Cal-
ifornia to help cover the costs
of driver benefits granted by
voters in the state last month.
The app now defaults to zero,
or no, tip.
A new message also appears
atop the prompt, saying cus-
tomers may “Leave an optional
tip on top of Driver benefits.”
Drivers said the change is cost-
ing them and offsetting any
gains from the newly added
benefits.
On Christmas Eve, Los An-
geles driver Audrey Wilson,
55, crisscrossed the city deliv-
ering meals, earning $1 or so
on most orders, she said. A $10
tip from a resident of a pala-
tial home just off Mulholland
Drive was one of her biggest
that night.
Wilson had recently re-
started driving for the service
after a months-long break. Be-
cause of the change in tip pol-
icy, she said, she plans to switch
to a competitor, the food deliv-
ery platform DoorDash.
“I was digging the work. I
got to make my own hours,”
Wilson said. “But now it’s rare
to get a tip over a dollar. It’s un-
believable.” She estimates she
now makes 30% to 50% less
daily than she did months be-
fore.
Grubhub spokeswoman Ka-
tie Norris said that California
drivers for the platform are
making 20% higher pay per or-
der, including tips, since Prop-
osition 22 came into effect, and
that app users can still choose
to leave a tip for their driver.
Proposition 22 — bank-
rolled by Uber, Lyft and other
gig economy companies —
won gig companies a carve-
out from a state labor law that
would have required them to
classify their workers as em-
ployees and offer a full slate
of benefits. As a concession to
workers, the ballot measure
outlined some new benefits,
including a minimum earnings
guarantee and a health care sti-
pend for drivers who clock in
a certain number of hours on
the road.
Ride-hailing and food-deliv-
ery platforms have since added
fees to cover the cost of the
new benefits: Grubhub added
a flat fee of $1.50 per customer
order. The company’s mar-
keting language draws a link
between the new fee and sug-
gested tipping practices.
“In support of California’s
Prop. 22, this payment helps
guarantee minimum wage
and healthcare benefits for our
drivers so they don’t have to
depend on tips,” reads a note
on the app under an informa-
tion tab explaining the new
driver benefits fee.
Rival DoorDash slightly in-
creased service fees for some
California orders to fund new
driver benefits, said DoorDash
spokesperson Taylor Bennett.
The company is also consid-
ering changes to some pro-
motions such as DashPass, a
subscription service that offers
unlimited deliveries for a fee,
that may also affect the price
for some customers.
Solve these puzzles on C4
SOLUTION TO
TODAY’S SUDOKU
Uber spokesman Davis
White said additional fees for
customers of the ride-hailing
giant will vary depending on
the city. For example, since
Dec. 14, each Uber Eats food
delivery order has risen by 99
cents in Los Angeles and $2 in
San Francisco.
The company has also
tacked fees of 75 cents in Los
Angeles and 30 cents in San
Francisco on to rides, with
the additional charge rising to
$1.50 in more sparsely popu-
lated areas.
Gig economy companies
have largely struggled to turn
a profit, first as startups and
increasingly as publicly traded
companies. Proposition 22
saved them the costs of over-
hauling their approach to labor
in California, a huge market.
Grubhub remains one of
the few that had become prof-
itable, and yet this year the
company lost money — even
during the pandemic, when
food delivery became a more
common habit because of
restaurant dining restrictions.
In June, European food deliv-
ery service Just Eat Takeaway
agreed to buy Grubhub for
$7.3 billion, a deal that will give
it a foothold in the U.S.
SOLUTION TO TODAY’S
JUMBLE
NYT CROSSWORD SOLUTION
LAT CROSSWORD SOLUTION
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pretty well.”
When businesses were re-
op
opened in mid-May, through
D
December the business re-
bo
bounded. The first quarter is
tr
traditionally slow and Dunlavy
ha
hasn’t paid herself for more
th
than a year.
“I put it all back into the
ga
gallery,” she said. “We could
ha
have closed if I hadn’t had this
at
attitude about taking care of
th
the people who will take care
of the gallery. To me the Red
C
Chair Gallery is the artists. Pe-
ri
riod. It’s not how it’s run, but
ho
how to make a good place for
th
the artists to be.”
Continued from C1
For other businesses, the
past 10 months haven’t been so
smooth.
Surviving the pandemic
takes grit, wrote Carrie Dou-
glass, owner of The Haven
co-working space wrote in
her blog. To get through the
shutdowns and the downturn
in business, Douglass wrote
that she honed her mission,
reached out to her members,
en
sought out investors, and even
sold her home to keep afloat.
“Starting a small business is
always risky, and we knew that,
but we obviously didn’t foresee
an international pandemic and
sweeping business restrictions,”
Douglass wrote. “The reality is
that this pandemic likely set us
back at least a decade or more.
“We share this because it’s
important for people to under-
stand the real risks of entrepre-
neurship.”
Down the road at the Box
Factory on SW Industrial Way,
Nickol Hayden-Cady, owner
of Foxtail Bakery, has hit the
wall financially and has put her
business up for sale.
She plowed through the Pay-
roll Protection Program funds.
She maxed out her credit cards.
And she has ran up as much
debt as she could to keep her
business going.
But without weddings, events
or lunchtime patrons, it was im-
possible to pay a staff, the rent
and the other expenses she in-
curred running her bakery and
restaurant. Now she and her
mom, who is also her partner,
are the only ones working.
They’re taking orders for
cakes and pies.
“We closed down. We’re
done,” Hayden-Cady said.
“The whole problem is we’re
losing thousands of dollars a
day. We put everything into
this without losing our house.”
No one could have pre-
dicted a pandemic, or one that
would have forced the closure
of dine-in restaurants, physical
distancing and limited custom-
ers. At the Small Business De-
velopment Center, instructors
often advise businesses to have
eight to 16 months of cash re-
serves on hand to weather a
downturn, a catastrophic event
like a hurricane, or a pan-
demic, or something that cre-
ates an economic shock, said
Ken Betschart, director of the
Small Business Development
Center at the Central Oregon
Community College.
The pandemic has hit in-
dustries differently, Betschart
said. Some have succeeded and
grown. Others have stumbled
and closed. And some have
taken this time to be a catalyst
for change by taking classes,
assessing their finances and de-
veloping a business plan.
“The restaurant industry or
the travel and tourism indus-
try is hurt because the econ-
omy doesn’t work on take-out
alone,” Betschart said. “It’s a di-
vided economy.”
Nickol Hayden-Cady stands in her bakery, Foxtail Bakeshop at
735 NW Columbia St ., in 2017.
ý
Reporter: 541-633-2117,
sroig@bendbulletin.com
Ryan Brennecke/The Bulletin file
The Small Business De-
velopment Center offers 15
classes for business owners,
most are filled and are short
term. Since the fall the enroll-
ment in these classes has been
up, Betschart said.
“Financials are the window
into your business,” Betschart
said. “You have to be able to see
where you can cut costs and
where you can shift your re-
sources.”
Entrepreneurs are hopeful
by nature and will go to ex-
treme lengths to protect their
business, said Adam Krynicki,
Oregon State University-Cas-
cades Innovation Co-Lab exec-
utive director.
“The failure of a business
is not just an entrepreneur’s
problem,” Krynicki said. “It’s an
Oregon-wide problem. These
entrepreneurs are doing ev-
erything they can to support
themselves, their families and
their employees. It’s up to all of
us to do everything we can to
help them survive.”
Hayden-Cody said she feels
like she achieved her goals
during the last three years cre-
ating and growing the Foxtail
Bakery. Before the pandemic
started in March she was look-
ing forward to even growing
to a second location, creating
a cookbook and catering for
weddings. She went from 300
or 400 customers a day to 15
during the height of the pan-
demic-related restrictions.
“We had 100 brides switch
from 2020 to 2021 and now
they’re starting to cancel 2021,”
Hayden-Cody said. “It’s just so
sad.”
At the Red Chair Gallery,
Dunlavy realized she needed
to maintain the space for the
artist members because with-
out artists, there is nothing for
customers to buy. The business
model relies upon the artists to
pay their rent and share a por-
tion of their sales when they
sell something. So far, all but
two of the 30 artists stayed.
“I have a business back-
ground, and I fell into the art
part part after I retired from
the business world,” Dunlavy
said. “That has saved the day
for us.”
When businesses were shut-
tered for six weeks early in
the pandemic, Dunlavy’s goal
was to always show activity
through the windows of the
downtown shop. At the same
time she eliminated all non-es-
sential costs and projected the
budget out for a year.
“I always try to be happy
to see customers,” she said.
“We wanted to keep the idea
that art is joyful. That worked
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