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Grubhub IS Using Tips to Calculate Delivery Fees, And Here’s Proof.

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When Grubhub rolled out their new pay model, they stated that the delivery fee would be determined “based on time and mileage, in addition to the full tip from the diner.”

It's pretty clear they lied. There's something else going into the calculation of earnings on most deliveries. The pattern is pretty clear and it's evidence that there's something else that Grubhub isn't telling us about how they calculate their payments. What exactly it is they are doing different, I don't know. Whether the difference is in favor of or against us as drivers, I don't know. But I do know that on the majority of deliveries, there is another element involved in calculating delivery fees.

In fact, the tip amount IS very certainly figured into how that calculation is made.

The .01 to .15 Pattern

I'm guessing you've noticed the pattern so far, haven't you? If you're a Grubhub driver, has it ever struck you how often the “cents” portion of your delivery pay is on the very low end? I don't know about you, but I've had entire days where on every delivery I made, the portion after the decimal ranged between .00 and .15.

See the pattern? EVERY payment, the number right of the decimal is a 0 or 1.

I've been watching this for awhile. The pattern is just too frequent and too consistent for it to be a coincidence. There is just no way mathematically that the payment amount can end between .00 and .15 as often as it does. In fact, I went through every delivery I had and 68% of my deliveries ended between .00 and .15

Okay, I'm a little embarassed to admit that I actually did that. If you haven't figured it out by now, I'm a bit of a nerd that way.

Looking at the numbers:

Out of 637 Doordash deliveries:

  • 35 ended in .00
  • 27 ended in .01
  • 29 ended in .02
  • 26 ended in .03, and on and on it goes, it varies a little, about what you would expect for a random set of payment amounts. That is until…
  • 3 ended in .16
  • 4 ended in .17, 2 ended in .18, etc. The spread between .16 and .99 was pretty normal, most being right around 2 or 3 for each amount.

(Told you I was a nerd)

So basically you have a normal distribution when you compare the payments ending in .00 and .15, and the pattern is about what you would expect for those between .16 and .99.

It's just that there's such a HUGE jump between that .15 and .16. THAT cannot be random.

Why does it matter? This is evidence that Grubhub is using some other factor besides simply distance and time to calculate the delivery fee.

Here's the deal: What we are paid is supposed to be determined by distance, duration, and tip. And there's an occasional bonus added usually to incentivize taking low tip offers. But if you look at the pay breakdown in the sample above, we see Delivery Fee (with no breakdown) + mileage (with a very specific mile total) + tip.

Grubhub made it very clear that the pay was supposed to be determined only by a time calculation and a mileage estimate. They gave specific examples like 22 cents a mile plus 13 cents a minute, but said rates would vary by market. However, the delivery fee was never broken down and I've yet to hear back on my inquiries of exactly what the per minute rate is supposed to be in my market. In other words, Grubhub has more or less the same transparency as Doordash in this regard.

But it's obvious that something else is going into that delivery fee calculation. Say you had a 4 mile delivery and 30 minutes time, and a $5 tip. 4 miles at 22 cents a mile is 88 cents, the 30 minutes at 13 cents a minute would be a $3.90 delivery fee, so you have $4.77, and adding the tip makes it $9.77. But for some reason it's like the computer has to knock that amount down to $9.15 or lower, or bump it up to $10.00 or higher.

Any time that the time plus miles plus tips equals a total amount that ends with an amount higher than .15 for the cents, that delivery fee is getting bumped up or down to compensate. And it has to be the delivery fee, because the mileage total is very specific. If it were the mileage amount being adjusted, it could be as many as 2 to 3 miles difference, and on most deliveries, that would stand out.

And the tip amount IS used to figure out that delivery fee

This is the thing about all that. Somehow, the tip is being figured into that calculation. That is because it is the TOTAL amount that is ending up in that range, not the tip amount. When the delivery fee is being calculated, it's looking at the distance charge at the 22 or 23 cents a mile depending on market, and the time charge at usually around 13 cents a minute, AND adding in the tip amount, and then for whatever reason is making an adjustment to bring the delivery total within that 16 cent range.

WHY would they do something like this?

I don't know. It makes no sense. I can't see any pattern. I can't see anything that explains what is going on. I wondered if there was a significance for the different endings, that maybe .00 indicated one thing and .12 indicated something else, but I can't see any pattern. The distribution is random enough that I just don't get it.

I don't know that there was anything intentional or any reason that someone at Grubhub would say that the payments have to fit in that range. I can't see any reason they would do it. My gut is that it's a weird by product of something in the programming. There are things about the timing of the deliveries that DON'T fall within that range that have had me thinking that for awhile, but when I discovered it was a .00 to .15 range, that makes it look even more like a computer thing.

Why would I say that about the range? Ultimately, there's 16 possible numbers there, between .00 and .15. Computers process things in bytes in which there are 16 different possibilities in each byte. When you get down to computer level programming, at some point you have to tell the computer how to translate from a 16 base data set to the 10-base set that we know. So I wonder if there's something happening there.

But it's weird. Why would the dollar portion be right, or at least within a dollar one way or the other, but the cents portion isn't? I did some old school programming way back in the day but I've forgotten way more than I've learned (which isn't much) so I'm not sure how to put it together.

But the bottom line is, somewhere along the line, distance, miles AND tip are all being taken into account to figure out the delivery amount. I don't think there's any getting around that.

But What About Those Deliveries That Don't Fall Within that Range?

Ever since I've noticed the pattern taking place, I've started paying attention to patterns where you get a delivery that falls within a normal range. It's been looking for awhile that when that happens, it's often in an unusual circumstance, such as:

  • On a second order in a multiple delivery from the same place. One order will be priced within the .00 to .15 range, and the other would be within a normal range.
  • On an order that appears to be manually dispatched. (we're getting into some real geekery here, be careful). If you look at your order history, you'll notice that almost every time is going to end with either an even or odd number. That's because the normal dispatching with Grubhub happens every 2 minutes. But when you see an order with a time that falls outside of the pattern, that's usually a sign that someone manually sent the order out to you or assigned it to you.

It seems like any time someone has had to be involved with the order other than just normal computer disptach, then the pricing is more likely to fall within a normal range. I also noticed that the number of ‘normal' priced orders was higher in busier time periods. During lunch and dinner hours, 30-40% of orders had a normal pricing to them, and lighter time periods were in the 10-20% range. I noticed this during extremely busy days and also noticed very few ‘normal' payments on slower days, so that led the geek in me to do some other charting.

In busier time periods (lunch and dinner) the percentage of orders that had normal .00 to .99 payouts increased substantially.

Ultimately, it seems like when there's some intervention that has to happen, for whatever reason the last two digits come out in the normal range, otherwise when it's completely up to the computer, we get the weird .00 to .16 range.

Is there any significance in this?

Without any transparency on Grubhub's part in how they calculate the time or how much they are paying for time, there's no way to say whether they are shorting us or paying a little more to get us in that range. I don't know if the computer is rounding up when maybe the payment ends in .90, but rouding down when the payment ends in .35, or if it's always bumping the payment down or what.

I don't have a lot of trust for Grubhub, so emotionally I'd lean towards it being an indicator they're shaving cents. But there's no evidence. The only thing that's evident is that when the computer is solely involved, there's an end result that comes up with a number that is different than just distance + time + tip. It's very clear that tips are involved in how the delivery fee is calculated. It's this kind of thing that leads me to that point of not trusting Grubhub in the first place.

Are we making any less because of this? Maybe, maybe not. Is it reason to quit Grubhub? No. So in a lot of ways, it probably doesn't matter.

The main thing about it is, Grubhub tells us that our payment is calculated one way. They insist that we get paid a delivery fee that is calculated indpendent of the tip amount. I'm sure some of that insistence is to cast some shade on Doordash. However, the bottom line is, there's enough of a pattern that is significant enough to be very clear evidence that something more is involved in how they make their calculations.

So in the end, to me, it's about trust.

Could this help someone else? Please share it.

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