Pizza delivery q&a Do you still tip when there is a $2 delivery charge?

Please do not confuse this fee with the tip. You should tip the same as you normally would. The fee is a surcharge on your bill for the store and not given to the driver. In national chains like Pizza Hut, Domino's, and Papa John's, the delivery charge does not go to the driver's tip. It is a disguised price increase for the store. With inflation, we're sorry to say it costs the store $2 more to produce your order. It's too bad they didn't tell you in the menu price. Pizza companies like to retain the appeal of low prices. They deceitfully snuck in a surcharge and hoped you didn't notice. Drivers are tipped employees and receive minimum wage, just like in the years before 2001 when there was no delivery fee. Hourly pay for drivers did not go up when stores began the delivery charge. In fact, there has been a recent trend since 2008 by national chains to reduce drivers to sub-minimum wage while increasing the delivery charge. Delivery charges were in the $1-$2 range by 2007, but by 2008 they grew into the $2-$3 range. A company will pay the driver $4 an hour, have a $2.50 delivery charge, not give the fee to the driver, and expect tips to make up the difference. The fee is not called a "driver charge" but we know the phrase "delivery charge" is very misleading. The surcharge covers the rising cost of ingredients, hourly wages for employees other than the drivers, the store's automobile insurance for non-owned vehicles and all other business expenses. When Domino's began their delivery fee in 2002, spokesperson Holly Ryan said, "The cost of food in general, combined with the cost of gas, utilities, labor and insurance, called for a price increase by Domino's." 1 Ryan said the company had a choice about how to make up for its expenses: charge a delivery fee, raise pizza prices across the board, skimp on ingredients or fire employees. 1 Domino's and other national chains operate under the same conditions and chose the fee. In addition, the delivery charge pays to subsidize discounts for pick-up orders. The fee is not charged to customers who pick-up their orders at the store. Those orders still require ingredients, hourly wages, and other behind the scenes business expenses. It does not matter how large the fee might become in the future. If the price increase reflected in the delivery charge could expand to absorb 75% of the order's cost, the fee will not go to the driver's tip. Then it will be a question of what fraction of the bill to represent with a surcharge. Customers will pay the same amount to the store no matter how much of the price they can disguise as a delivery charge. Enjoy your $9.99 large pizza. Oh, and there's a $10 delivery charge. The store will make the same profit with $17.99 and a $2 fee. In an independent store or small franchise, the delivery charge usually pays for the driver's hourly wage. They might start the driver at nothing per hour or $2 an hour and then pad it with the fee. A small store might divert it to cover the driver's mileage reimbursement. How they use the fee varies from store to store. Even a small shop might keep some of the fee for itself. It costs more for the store to have delivery service. They have to cover non-owned auto insurance. Adding a delivery charge is one way to compensate. This is a business fee. Most of the time, the driver doesn't see it. The national chains might use a small portion of the delivery charge to pay for the driver's mileage reimbursement. That is not the tip. This compensates the driver for their vehicular expenses to bring them back up to their hourly rate of minimum or sub-minimum wage. In the years before the delivery charge started, the national chains had a mileage rate of 50 to 75 cents per delivery. Gas was less than $1.50 a gallon. Today the mileage rate is about $1.00 per delivery, and this is with a $2-$3 delivery charge. The difference in mileage rates is only about 25 cents. This means a store with a $2 delivery charge keeps $1.75 for itself. Not all mileage reimbursement comes from the delivery charge. Only a small fraction does. I'm shocked the store tells you there's a delivery fee. This is an internal cost of business adjustment that customers don't need to know about. It seems the company goes out of their way to mess up the driver's tip and confuse customers. They make people think it's a gratuity. It was completely unnecessary for the order taker to mention the delivery charge. Our advice is to look past it. It's just another line on the bill. You should tip the same. For etiquette purposes, the tip is calculated after the delivery charge.

1 Associated Press. (2002, August 12). Domino's tests charge for delivery. Retrieved August 13, 2009, from http://archive.columbiatribune.com/2002/aug/20020812busi012.asp

Last updated: August 13, 2009 return to top