alt Hacker News> It is a mechanism to move labor costs to the consumer.
How does this work? The corp already handles some form of payment to the worker, especially when you tip as part of a card payment. And in both cases, the consumer foots the bill.
How's it different from paying the worker more and asking for more money upfront?
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There is a very clear different from the consumer's point of view between paying a 20% delivery fee with no tip (and realistically having most drivers still expect an in-person tip) and a 5% delivery fee with a tip amount of your choosing (and maybe only 1/1000 drivers expecting/requesting yet more).
I have always been a generous tipper and I try to always put myself in that person's shoes when deciding how much to tip but even I notice the psychological difference. If you don't ever think about it, have never had a job waiting tables or dealing with the public, it'd almost be a nonstarter to have a higher delivery fee regardless of tip expectation.
psychologically they are very different. Framing the wages as a "tip" moves the conversation to the drivers and users, where users think tips are an out of hand culture problem and drivers view the users as stingy. Then the company sits out of the spotlight collecting their absurd rents
It moves the real cost of the additional labor from the prices displayed for items (like you would see in a B&M grocery store) to some tertiary part of the purchase process that is displayed 1) after the used has gone through the effort of app navigation and selecting their purchases and 2) has been through the majority of the purchase funnel and self-selected as a high-prospect sale. This helps keep the listed prices for items in these apps relatively comparable to their in-store listed prices, acting to convince the user the sale is reasonable (similar to online sellers making up for low listed prices with high shipping prices). Moving this additional cost to some tertiary step lessens the impact of goods pricing seeming too high by adding a "small optional fee" at the end of the purchase process that the user is expected to subconciously understand is effectively a bid on labor. I'd imagine the psychology behind it is depressing.
Different because now list price of a sandwich is $8.99 instead of $14 that customer will actually pay. Hotels, resorts, restaurants, tours etc are master at this. Even after knowing these add-ons people fall for it often enough to keep this practice running.
Besides economists think positively of this so it has support not just from interested parties but officials, think tanks etc.
The gready sleazeballs who like the "tipping" system (mostly, restaurant owners) would prefer to pay all their employees $0 and have all diners/customers/etc pay 100% of the wages out of guilt.
While 10% was customary in the first half of the 20th century, the standard tip gradually increased to 15% by the 1980s.
In 2025 it's not uncommon to see little shortcut buttons for 20, 25, 30%. You can see where this is going. They want us to tip 50% and they pay $0, even though restaurant menu prices are one of the things that has experienced more inflation than other things.