Money Rehab with Nicole Lapin - Tips on Tipping

Episode Date: June 23, 2021

We all know that when we go out to eat, we should tip waiters 20%… but what about delivery drivers? Today, Nicole answers the question: when it comes to delivery drivers, do you tip a flat fee or a percentage of the bill? Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. My producers won't let me call this episode just the tip,

but you'll see why I wanted to call the episode that when you hear this listener question from Kyle. Hey, Nicole. My girlfriend and I have done a lot of ordering in during quarantine, and we need you to settle an argument for us. Do you tip 20% on delivery? My girlfriend says yes, but I say no. My thinking is that you're really tipping them for showing up at your house, and it's the same distance whether you're ordering $10 bagels or $80 in Chinese takeout. What do you think? This is such a great question, Kyle. And it's so funny. I've definitely

had this debate on the home front, too. And X and I actually got into this because he was adamant that no matter whether it was fancy food or if it was fast food, the delivery driver was doing the exact same thing, bringing the same bag roughly to the house and didn't know whether that was Nobu or it was Taco Bell. So he said flat fee, whether it was five or ten dollars, depending on the distance. So he kind of took that into consideration. Normally, when there's an option, I always put the maximum amount and it would always tell me something about the people I was dating to depending on what button they would push. But I truly did stop a date when the guy did not even push one of the buttons and didn't tip the taxi driver. I was like, this date is absolutely over. I digress. So yeah, I got into a fight with an ex about this because he said that you should

just tip the flat amount for delivery driver. And I was of the mindset that you should tip 20% or more. My current boyfriend and I agree on this. That's why he is my current boyfriend. But I understand why this is such a hotly debated topic because there's definitely an argument for both sides. So let's think about why we tip. At a sit-down restaurant, if you have stellar service, the convention is to leave about 20% for a tip. We all know this. And what is that 20% tip for? Well, a big part of the job is feeding you, right? The waiter is the person keeping you from getting hangry. And for that, they are worth their weight in gold. So right now, we're really just talking about your waiter bringing you food,

which is the same thing a delivery driver does. But unlike a delivery driver, a waiter at a restaurant is also making sure that you're enjoying your meal. I mean, think about it. I know that you've been to a restaurant where a waiter introduces themselves like, hi, I'm Nicole and I'll be taking care of you tonight, right? That's the go-to restaurant icebreaker. A waiter takes care of you. They give you their recommendations on the menu because inevitably someone at the table is going to ask. They check back to see how you like what you ordered. If you need a little extra salt or hot sauce, they'll bring it to you. If you didn't get what you ordered, they will fix it. A waiter does all these things for you, but a delivery person does not. Here's another key difference. It's pretty well understood that waiters and waitresses live off their tips.

Waiters make less than minimum wage in most cases. I mean, way under minimum wage. Less than $3 an hour is actually totally acceptable according to the U.S. government. Seriously. I'm quoting here. An employer may pay a tipped employee not less than $2.13 an hour in direct wages if that amount plus the tips received equal at least the federal minimum wage. The employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. You gotta love that double negative government jargon. What the actual fuck? In other words, according to the U.S. Department of Labor, you can get away with paying restaurant employees $2.13 an hour in the U.S. of A so long as they're making more than $30 a month in tips, that is an extremely crazy low bar. So when we're eating at a restaurant, we definitely, or hopefully,

have the awareness that the majority of a waiter's paycheck comes from us. There's not the same understanding when it comes to delivery drivers. We assume that delivery drivers are making an hourly wage, so the possibility of a tip is not as important to their income. And part of that is true. Delivery drivers do tend to make more than minimum wage. According to Glassdoor, most food delivery drivers are making between $9 and $15 an hour. All of this taken together is why people argue that delivery drivers should get a flat tip, a chunk of change that is not a percentage of the bill, a dollar amount meant to tip them for the service of bringing you your food.

So this is the crux of your argument with your girlfriend, Kyle. And you both make good points. But you can see how delivery drivers may get the short end of the stick often. Customers may assume that delivery drivers are making a better hourly wage, so they tip lower, while employers may use the possibility of tips as an argument for paying a lower hourly wage. Plus, delivery people have higher costs than waiters. They're on their bikes or in cars or on motorcycles, and they're paying for their own gas. They're paying for their own tune-ups or spare parts. And they need to make sure that their mode of transportation is in tip-top shape because if their car breaks down, they can't do their job. So let's settle this. According to the Emily Post Etiquette

Institute, you should tip 10 to 15% of the entire bill for the delivery. What I'd recommend is starting by calculating 20% and then think about some of these other factors. Is your food pricier than the average meal in your area? Are you only getting one bag of food? I give you my blessing then for a 15% tip if you must. If you've ordered seven bags of food and drippy soups and mochachinos and live over the river and through the woods and it's fucking snowing, then you should definitely be tipping more than 20%. And what about if you're just picking up food? Well, honestly, there's no obligation to tip whoever hands you your food at the takeout situation that's going on at the restaurant. But 10% is nice if they do go above and beyond for you, like they're meeting you at

your car or they're putting your meal together faster than expected. Here are some other tipping conventions from Emily Post that you may not know. When you're staying at a hotel, leave $2 to $5 a day for the housekeepers. And you want to do this every day because every day there could be a different housekeeper coming to clean up your special, special mess. If that mess is particularly special for whatever reason, then I would strongly suggest to leave more. If you're staying at a nicer hotel, I would also say to bump that up as well. For personal care services like getting a haircut, a massage, a wax maybe, you'll want to give 15 to 20% as well. For movers, experts say that you should also set aside 20% of the total cost of the move for the tip and split it equally among

the movers. If you live in a 10-floor walk-up and you have a grand piano, I'm gonna say you probably want to tip a little bit more than that. If you're rolling your eyes at this 20%, I hear you. That can really bump up your bill. But just like you're budgeting for emergencies in your spending plan, you should factor the 20% tip in your spending plan for eating out. Pay it forward. Literally. And here's a tip you can take straight to the bank for tipping 20% for delivery drivers. Period. End of story. Goodbye. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law.

Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. Supervising Producer, Michelle Lanz for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.