Latest news with #gigwork
CNET
22-05-2025
- Business
- CNET
Here's How Delivery Drivers Are Paid and How Much You Should Be Tipping
Tipping used to be pretty straightforward -- mostly something you did at sit-down restaurants or for the occasional delivery from a pizza joint that staffed its own drivers. But now, with the boom in gig work and on-demand convenience -- think food delivery apps, grocery drop-offs and everything in between -- figuring out how much to tip (and who actually gets what) has gotten a lot trickier. You've probably seen those extra charges -- delivery fees, service fees -- and wondered: Where does that money go? Does the driver get any of it? And if not, how much should you be tipping on top of all that? It's not as clear-cut as it used to be. There's a lot of uncertainty about tipping on delivery More than two thirds of people polled were unsure about how much to tip on delivery. Grubhub Anxiety about tipping is real. A 2023 report from Pew Research Center indicates that only about a third of people are confident about when they should tip and how much. The same report reveals that 76% tend to tip on food delivery, however. If only a third of those 76% are confident in how much to tip, assuming that their confidence isn't mired in incorrect or outdated information, only about 25% of everyone ordering food delivery is tipping appropriately or at all. I dug into some of the top food delivery services for information about who gets paid for what, whether you're ordering a meal for one person, lunch for the whole office or groceries for the week, in hopes of answering the question of how much should you actually be tipping for food delivery? Naturally, the best answer is, "it depends," but here's a look at various platforms and scenarios, with some authoritative advice on considerations to make when factoring in a tip. How are restaurant delivery drivers paid?While some restaurants have always been in the delivery game -- looking at you, pizza joints -- for many restaurants food delivery is made possible only through apps such as DoorDash, GrubHub and UberEats. Even if you call a restaurant directly for a delivery order, chances are good that your order will still get outsourced to one of those services. If you're looking to save a little money by cutting out the middleman, you're welcome to ask your favorite restaurants whether they employ their own delivery staff. A popular theme on Reddit has users offering up lists of regional or city-specific lists of what restaurants operate independent delivery. Skipping the apps and ordering directly through the restaurant often helps the drivers keep more in their pocket. Getty Images Assuming you're dealing mostly with third-party delivery services in most cases, I've consolidated some information from DoorDash, GrubHub and UberEats about what drivers are paid -- information that they all make readily available -- which rely on similar structures and procedures. Generally speaking, delivery or service fees indicated in your order go to the platform you ordered through and/or the restaurant, not the driver, although they may in part help support driver pay. Drivers are not paid a set hourly rate but typically a fee per delivery, which is variable based on factors such as distance, expected time commitment and desirability of the particular job. Incentives are often available for peak times, as well as completing a certain number of deliveries in a specified time frame. In certain markets there may be a guaranteed minimum pay for drivers who sign on during unexpectedly slow times and, occasionally, fees are built into the app to support these economics as well. Drivers are responsible for their own car-related expenses, including gas. 100% of tips added by the customer go to the driver but the driver may only see the total payout for the delivery, which doesn't delineate between the base rate and the tip, or merely indicates an expected tip. (So they don't necessarily know that you're a generous tipper but they'll definitely know if you indicated no tip, even if you plan to tip in cash upon delivery). How much should you tip for restaurant delivery? Getty Images While you may not know exactly how much your delivery driver is making, you can bet that tips are needed to push them over the minimum wage threshold. Toast, a point-of-sale resource for restaurants, suggests that third party delivery services warrant a 15% to 20% tip. Tip more than 20% during inclement weather It's encouraged to tip more if your delivery person is working during bad also have your common sense and courtesy to rely upon when setting a tip. While a $2 tip may reflect about 20% of a $9.99 dinner special for your favorite General Tso's, if you're ordering it from a place across town in the middle of a blizzard, those $2 are harder won for your driver or delivery person than if they're just zipping it from around the corner. Order size matters Consider tipping at a higher percentage when your order total is 20% on large orders starts to look like a pretty hefty bonus for the driver, consider the additional time and effort needed to ferry multiple bags or boxes from the restaurant to you and how much more time is required than for small orders for the same amount of driving. And if you're order is small, consider tipping at a higher percentage because 15% or 20% of a $15 tab is not commensurate with the effort on the part of the driver to get your food there safely. GrubHub shared some advice for tipping for food delivery and suggests 20% but nothing less than $5. Other factors to keep in mind: Drivers may be able to bundle smaller orders together for nearby deliveries, but for a large order it might require use of the entire vehicle, so an additional 3% to 5% is warranted. Inclement weather can make for a miserable or even dangerous work day. They're out there delivering so you could stay warm and dry, so an extra few dollars is a good act of gratitude. If you're living in a fifth-floor walkup, or if the elevator in your building is compromised, that's also something you should be considering tipping a little extra for. They won't be privy to that information in advance when deciding to take on the delivery. How are grocery shoppers/drivers paid? Grocery delivery works a bit differently than restaurant delivery. Instacart In some ways, grocery delivery works just like restaurant delivery but, of course, the primary difference is that your driver is also doing the work of assembling your grocery order. (Having acted as my own Instacart shopper for an examination of Instacart prices, I can attest that this is not simple.) Much like with restaurant apps, the service fee and delivery fee built into platforms such as Instacart do not go to the shopper/driver. Like the restaurant delivery services outlined above, shoppers earn a base pay that is calculated for specific deliveries, not based on time spent on the clock, and they rely upon tips to result in a wage that is worth their time. Amazon Fresh and other grocery delivery services have become a popular alternative to weekly trips to the market. Amazon According to a representative from Instacart: Shoppers are paid by the batch, which may include multiple deliveries. They are always given upfront information like store location, number of items and units, and approximate delivery distance, to decide whether they want to shop the batch. They also see the full Instacart payment offered, as well as the expected customer tip, before accepting a batch. (While you may indicate a tip at the time the order is placed, you also have the opportunity to adjust the tip after the service.) Some of the factors that make up batch pay include the number of items and units in the batch, how heavy those items are, the expected time it will take for a shopper to shop all of the items in the batch, and the estimated distance that a shopper will need to drive. Shoppers can always choose the batches that they want to shop and they're never penalized for not accepting a batch. How much should you be tipping for grocery delivery? Grocery and restaurant delivery tipping protocol is teeming with gray areas. Walmart + Restaurant deliveries benefit from association with restaurants, where people at least expect to tip when dining in person, so providing a tip for delivery isn't out of the ordinary. Grocery stores don't have the same association. You wouldn't tip your cashier when shopping in person, although your personal shopper is doing more than just bringing your prepared order to you, which makes the question of what to tip a little murkier. The base rate for grocery shopping, however, also factors in more time than that of a delivery driver. If your driver is also your shopper, 20% should be the minimum Your grocery delivery person works hard to get your order together. Instacart Amenify, a platform providing home services for residential buildings, suggests tipping between 10% and 20% for grocery delivery. The special circumstances described above -- inclement weather, challenging order or delivery logistics, or special handling -- should warrant a little extra generosity. This is again complicated somewhat by the delivery apps themselves. Not every app or market allows you to choose a tip at the time of checkout. While you can add a tip after the shop is complete in just about every platform, your shopper is working without the benefit of that knowledge. Instacart does allow the possibility of adding a tip up front, but the pre-populated tip amounts indicate tips of 2.5%, 5%, 10%, and 15%. You can enter a custom tip amount but as a built-in suggestion it doesn't err on the side of generosity.
CTV News
15-05-2025
- Business
- CTV News
Christopher Liew: The harsh truth about side hustles in Canada
Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial. In days past, side hustles were often just a way to make passive income on the side to help save extra money. Now, for many, side hustling is a way of life that allows people to earn the extra money they need to pay their rent and bills, save up to start a business, or contribute to their retirement. Side hustles offer flexibility, independence, and a chance to earn extra income in an era of rising living costs. Whether you're interested in rideshare driving and food delivery or freelancing and online businesses, taking on so-called 'gig work' is becoming the norm, especially for those living in a larger, more expensive urban environment. The harsher realities of side hustles For many, juggling a full-time job and a side hustle (or multiple gigs) leaves little time for rest, relationships, or financial stability. What often starts as a way to stay afloat, get ahead, or pursue a passion can quickly become unsustainable. While having an extra side job or side business can definitely help you elevate your lifestyle and catch up with bills, there are some all-too-realistic realities that you should consider beforehand. 1. You'll pay both the employee and employer portions of the Canada Pension Plan (CPP) contributions One significant financial difference for self-employed individuals compared to regular employees involves CPP contributions. While employees and employers each pay a share (5.95 per cent each in 2025), the Canada Revenue Agency (CRA) requires self-employed individuals to cover both portions, for a total of 11.90 per cent. This mandatory double CPP contribution is separate from and in addition to the regular federal and provincial income taxes you'll owe on your net business profit. 2. Work is often seasonal Depending on what type of gig work you do or what your industry is, your income can become heavily reliant on the seasons and holidays. For example, as a rideshare driver, you'll generally be the busiest on weekends (in larger cities), around holidays, or early in the morning if you live close to an airport. This can limit the amount you can earn during certain times of the year. 3. You're on the hook for everything One of the hidden perks of traditional employment is having someone else to absorb the fallout when things go wrong. In the gig economy, you are the boss, the worker, and the customer service. So when a job runs late, a client is unhappy, or a refund is demanded, it's all on you. That constant pressure can wear people down. 4. The time trade-off is real A common misconception is that gig work is 'flexible.' And while it's true that you can choose when you work, that doesn't mean you work less. Many side hustlers end up trading their evenings, weekends, and personal time just to make ends meet. Is having a side hustle worth it? In my opinion, the key to side hustling and being happy is to have an end goal. If you're working the extra hours to build a small business or save extra money with a side hustle, it should be something that helps you build towards a larger goal of yours. With that in mind, you'll be able to push through the hard times, stay focused when things aren't going your way, and balance your budget effectively.
New York Times
14-05-2025
- Automotive
- New York Times
At LAX Airport, Uber Drivers Wait. And Wait. And Wait.
Before the sun could rise over Los Angeles International Airport on a recent Tuesday, hundreds of Uber and Lyft drivers had formed a queue nearby, stretching around the block. It was 5 a.m., and the waiting game was about to begin. In a few minutes, the line of cars would file into a fenced-off parking lot, a mile from the arrival terminals. It is known officially as the Transportation Network Company Staging Area, but drivers call it the 'pen,' where they wait to be matched with passengers getting off flights. The spot used to be a prime place to catch rides and earn decent money. But these days, there seem to be few rides to go around. Veronica Hernandez, 50, parked her white Chevy Malibu at 5:26 a.m. and opened the Lyft app to check her place in the queue: 156th. It would be an hour and a half before her first ride of the day. 'You have good days and bad days,' Ms. Hernandez said, swiping through a screen showing her daily earnings on the app that week: $205, $245, $179. 'Hopefully it's a good day.' Like ride-hailing drivers across the country, Ms. Hernandez has seen her pay decline in recent years, even as the demand for her work feels greater than ever. And with the cost of gas and car insurance rising, the already slim margins of gig work are becoming less workable by the day, she said. No place is more emblematic of these problems than LAX, one of the busiest airports in the world but one of the most difficult places for gig workers to earn a living. 'It used to be a real way to earn money,' Ms. Hernandez said. 'Now you can barely survive on it.' In the early years of app-based platforms like Uber, Lyft and DoorDash, people flocked to sign up as drivers. The idea of making money simply by driving someone around in your own car, on your own schedule, appealed to many, from professional chauffeurs looking for extra work to employees working in the service industry who realized they could break free of the 9-to-5 grind. The key concept was that drivers would be independent contractors, responsible for their own expenses, without health insurance or other employee benefits but with the flexibility to work whatever hours they wanted, without having to sign up for a shift or have a boss. And in the early years, wages were high. Drivers would regularly take home thousands of dollars a week, as Uber and Lyft pushed growth over profits, posting quarterly losses in the billions of dollars. Then, when they became public companies, profitability became a focus, and wages gradually shrank. Now, earnings have fallen behind inflation, and for many drivers have decreased. Last year, Uber drivers made an average of $513 a week in gross earnings, a 3.4 percent decline from the previous year, even as they worked six minutes more a week on average, according to Gridwise, an app that collects data and helps drivers track their earnings. For drivers in Los Angeles, average hourly earnings on Uber are down 21 percent since 2021, Gridwise found. LAX introduced the new system in 2019, in an effort to cut down on bumper-to-bumper traffic at the arrival terminal. Instead of being picked up by Uber and Lyft drivers at the curb, passengers must walk or take a shuttle from their terminal to a pickup spot called LAX-it, next to Terminal 1, which can take up to 20 minutes. But the driver side of the equation is something passengers rarely see. That morning, inside the lot, with hundreds of parked cars and the smell of port-a-potties, the mood was grim. Drivers waited for hours to snare rides — 'unicorns,' they called them — that would pay them a decent wage of more than $1.50 per mile. By 10 a.m., the pen had devolved into chaos. While around 300 drivers are waiting in the virtual queue at a given time, the parking lot has only around 200 spots. So, as new cars filed in, they double-parked in front of cars that were already there, which needed to leave the lot to pick up passengers. The result: a cacophony of honking and yelling, drowned out only by the roar of the jet planes overhead, which arrived about every two minutes. Sergio Avedian, a gig driver and the founder of a ride-hailing blog called The Rideshare Guy, settled into the pen on a recent Tuesday morning at 10:36. After finding a parking spot, he opened the queue — 256th in line. As he watched the Uber and Lyft apps, rides popped up that were rejected by drivers higher in the queue. But the rates were pitiful: $9.87 for a 13-mile trip, $19.97 for a 25-mile trip and so on. He rejected all of them. 'We call this 'decline and recline,' Mr. Avedian said, lowering his front seat. To pass the time, groups of drivers smoke cigarettes and play cards. Some nap in their cars or watch YouTube videos. Others wander around hawking phone chargers and car-cleaning products. Occasionally, arguments break out among various groups — sometimes along racial lines — when competition for scarce trips grows fierce. A separate economy exists in the pen to feed drivers. Outside the parking lot are taco trucks, but inside, some women sell Chinese food from the trunks of their cars, trading plastic bowls of wonton soup for cash. Some drivers have taken out their frustrations by scribbling curses against Uber and its executives on the walls inside the port-a-potties, lamenting the hourslong rides that result in no tips, or the days they've been locked out of their accounts with no explanation. Sitting in the trunk space of his Toyota Sienna, Andreh Andrias smoked a cigarette as he refreshed his Uber app. Mr. Andrias, a 57-year-old from Iran, said he could make $3,000 a week before expenses driving for Uber before the pandemic, but that has since declined significantly. He flipped through his most recent weekly earnings on his phone: $1,670, $1,700, $1,053. 'You have to take care of the family,' said Mr. Andrias, who has a wife and daughter, and more than $7,000 in car and rent payments to make. 'Right now, I cannot.' The New York Times first asked Uber about the conditions of driving at LAX in 2023, and the company said it was aware of continuing problems. But not much has changed in the years since. Uber said that a variety of factors were responsible for lower wages, and that its take rate — the percent of each ride's fare that it keeps for itself — had not increased in Los Angeles. Liability insurance costs, the company said, have skyrocketed, and now account for 43 percent of the rider's fare. The company also said a $4 surcharge for ride-hailing drivers at LAX, along with the new pickup system, had significantly lowered the demand for rides at the airport. LAX's public relations division did not respond to a request for comment. C.J. Macklin, a spokesman for Lyft, said the company was working with LAX to develop a new holding lot for ride-hailing drivers, which would be built as part of the airport's new, $5.5 billion construction project, which includes a light rail between terminals and is supposed to reduce traffic. 'A year from now, LAX will look completely different, and we're excited for a smoother, faster experience for drivers, riders and the entire city,' Meghan Casserly, an Uber spokeswoman, said in a statement. In the lot, there was a pervasive sense of sluggishness; the discontent and hours of waiting seemed to lull drivers into inaction, even when a seemingly decent ride chimed on their phones. 'There's drivers who really don't know what they're doing, and they end up at the lot just because they don't know any better,' said Pablo Gomez, an Uber driver who frequents LAX. 'They dropped off a passenger, it said to go to the lot, and they're like, 'OK.' They don't even know what they're waiting for.' Driver advocates like Mr. Avedian and Mr. Gomez try to help drivers strategize and make the most of their time. But Mr. Gomez also empathizes with drivers who keep praying for a windfall. He used to be a compulsive gambler, he said, and driving for Uber feels similar. 'The wasted time is part of that psychology of the addict. You're just chasing that ride, that score,' he said. At 2 a.m., when the pen closed, some drivers left to look for a parking spot elsewhere in the neighborhood, where they would sleep in their cars until the lot reopened at 5. Others hoped to catch one final ride in the direction of home, which for many was over an hour away. Ms. Hernandez was sitting on the hood of her car on Tuesday when it hit 11 p.m., her time to head home. She watched as offers popped up on her phone against the wallpaper of her two children, ages 25 and 26. In between rides, she checked her email, hoping to hear back from jobs she recently applied for at a doctor's office and a warehouse. Finally, a ride appeared that would take her near her home in Montebello, a 50-minute drive east. It was only $28 for a 27-mile trip — far from a unicorn — but she accepted. 'It's not the best rate,' she said. 'But you have to make it worth your time.'
Daily Mail
13-05-2025
- Business
- Daily Mail
'Money illusion' explains why side hustles are actually making you poorer… and how you can earn more
More than half of Americans now have a side hustle alongside their nine-to-five job — but it might not actually be making them richer. The rise of the side hustle has gone hand in hand with a real time drop in workers' earnings and years of high inflation, which has led to a cost of living crisis. Sky-high house prices and mortgage rates, as well as spiking rents and grocery bills, has meant gig work is essential just to make ends meet for many Americans. Last year the Federal Reserve found that 38 percent of gig workers couldn't cover a surprise $400 expense if they needed to. And new research shows that for many, a side hustle is not helping to boost their financial position. In some cases, their wallets are actually taking a hit. One of the reasons for this is because of so-called 'money illusion.' According to psychologists, this is when people treat money differently when it lands unpredictably — like from a side hustle — rather than from a steady paycheck. The 'money illusion' Net loss after gig work is partly due to the 'money illusion' that leads people to treat sporadic injections of cash as free change or money to play with. 'Irregular earnings tempt irregular spending,' researchers at KillerStartups noted. By contrast, a regular paycheck can help workers to plan ahead by consistently divvying up their money into different pots. This might include an account for spending on needs such as bills, one for wants, and another for an emergency savings stash. It also helps that a regular paycheck can siphon off savings in to a 401(K) without the earner having to think about it. Furthermore, tax for most employees is taken straight from their paycheck. This means there is less risk of overspending and not having the cash to meet a large IRS bill. Nominal versus real rate of return Another reason side hustlers are not making as much money as they might think they are, experts say, is a failure to understand the difference between nominal and real earnings. A recent study by MarketWatch found that a typical gig worker earns just $250 a month from their side hustle. But this is not the take-home pay it may initially appear to be. This is because the input costs of the side hustle can quickly eat in to the overall figure. For example for ride-share drivers — which is a common side hustle — platform fees for companies such as Lyft and Uber can add up. Other costs such as insurance, unpaid wait times and fuel, also reduce the real return on workers' time. For other side hustles, such as reselling used items or art online, fees such listing charges, payment-processor percentages, and 'boost' fees to push products up a site's algorithm can all eat into profits. Hidden tax traps Tax on a side hustle can often come as a shock to gig workers. Any side hustle net income over $400 will incur a 15.3 percent self-employment tax. With state income taxes and the previously mentioned input costs, an extra $250 a month can dwindle quickly. Tax experts have also warned that new rules for reporting side hustle and app-based income took effect this year and freelancers need to pay attention. 'A lot of people think that if it's a hobby, or it's part time or it's a side gig, then they don't owe money on that. Totally wrong,' tax expert Mark Steber previously told The hidden math everyone ignores There are three more factors to consider, even after working out the rate of return after costs, fees and tax. Firstly, the opportunity cost of the time spent on the actual labor. In a lot of cases, spending this time up-skilling or gaining further educational qualifications to get a higher paid job could yield better financial results. Secondly, assessing the financial gains against the risk. Experts argue that there should be a 'volatility premium' to gig work because it is sporadic and hard to predict. This leaves the worker at risk of not being able to earn enough to meet their monthly bills or balance the costs they are putting in. Lastly, many workers do not factor in the financial side effects of burnout. As such, it is recommended that gig workers track any sick days, or extra expenses such as takeout meals because they were too tired to cook. Americans working across many different industries are increasingly receiving some or all of their income via apps like Venmo or PayPal, which they have to report to the taxman One side hustler's regret KillerStartups analyst Nathaniel Foster detailed his own disastrous foray into making some extra income. Foster said he started working as an Uber driver on the weekends to pay down student loan debt. 'The plan felt brilliant — until I penciled out the real return,' he wrote. Factoring in the costs of fuel and car maintenance brought his hourly earnings rate down to $14. Self-employment tax reduced the figure further, and then the real clincher came after a minor crash. 'A fender-bender, uninsured because my personal policy didn't cover commercial driving, swallowed three months of profit,' Foster lamented. 'By year's end, the loans had barely budged, while my Camry's shocks groaned like an old floorboard.'
