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

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 are they doing? I don't know. Is the change in our favor or against us? I don't know, but I can guess.

Whatever it is they're doing, an odd pattern in the normal payouts from Grubhub says there's another element involved in how they calculate our delivery pay. And that pattern suggests it's impossible for them to calculate pay without using the tip as a basis to determine the delivery fee.

The .01 to .15 Pattern

Have you nonticed this pattern in the payments that you get for Grubhub deliveries? ? 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 fit this pattern: On every single delivery payment, the number 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.

It doesn't happen on every delivery. But I've gone through my deliveries and counted. I'm a nerd that way. 68% of my

In fact, I went through every delivery I had and 68% of my deliveries ended between with the amount after the decimal ranging from .00 to .15

A normal pattern would be about 16% of deliveries.

Looking at the numbers:

I looked at 637 Grubhub deliveries. I sorted them by the last two digits and counted how many times a payment ended in .00, .01, and so on. (Told you I was a nerd)

  • 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…

I won't list every single one. But it goes on like that, varying between 25 and 35 instances each. Until you get to payments ending in .16

  • 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 of 25 to 35 each of payments ending in .00 and .15. It's a fluctuation you would expect from a random sample. But then from .16 through .99, it's 2 or 3 instances of each.

There's such a HUGE jump between the .00 to .15 and the .16 to .99 counts. THAT cannot be random.

Yes, but how is this evidence that tips are used to calculate delivery fees?

Here's the deal: What we are paid is supposed to be determined by distance, duration, and tip. Grubhub sometimes offers a bonus or incentive.

All of that adds up to the total amount that we are paid. But it's impossible to get that kind of pattern unless something is calculated in a way that ENDS UP with payments in that range. So let's look at some factors:

Breaking down the example above.

My first thought when seeing something like that is to say maybe it's just how the delivery fees are calculated. And if people are tipping even dollar amounts, it would look like that, wouldn't it?

But look at the pay breakdown in the example above:

  • $3.24 delivery and miles plus $10.80 tip = $14.04
  • $5.66 fees and $6.44 tip = $12.10
  • $4.94 fees and $7.21 tip = $12.15
  • $3.63 fees and $15.51 tip = $19.14
  • $5.10 fees and $6.91 tip = $12.01
  • $3.12 fees and $4.95 tip = $8.07

The payout amount ends with the last too decimals being from 00 to 15.

But there's no such pattern in the delivery fees. Nor is there a pattern with the tip amount. Both have more of a random look.

But they ADD UP to where the payment ends in a way that fits the pattern.

It happens too often to just be a coincidence.

For some reason Grubhub's computer has to come up with a total payout ending from .00 to .15.

I have no idea why. I think it's a computer thing, but we'll talk more about that shortly.

Grubhub made it very clear that 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.

But it's obvious that something else is going into that delivery fee calculation.

Using that formula, a four mile thirty minute delivery would pay $4.78. Add on a $5 tip and you have $9.78. Somehow the computer has determined that your final pay has to be between $9.00 and $9.15, or between $10.00 and $10.15.

What that means is that Grubhub has to readjust the delivery fee based on the tip so that final pay would fall into that range. It's the only way that this pattern could be happening.

Well…

Not the only way. The other alternative is much worse. The only OTHER way this could happen is if Grubhub skims a part of the tip to bring pay down to that amount.

Any time that the total fees and tips end up with the last two decimals higher than .15, the fee is getting bumped up or down to compensate.

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

If all tips were in even dollar amounts, that might explain something. But go through your pay statements. What do you see? Those last two digits are all over the place. It makes sense when you think about it, because Grubhub typically recommends a tip amount as a percentage of the order (though there have been exceptions)

The fact that the total amount paid, AFTER the tip, is what fits into this pattern, tells me that the delivery pay is being recalculated so that the final pay can fit into that pattern.

In particular it's the part that Grubhub labels the “delivery pay” that's being adjusted. Their breakdown usually has the tip, mileage, and delivery pay. When you divide mileage pay by miles, you get a consistent amount each time, so they're not fudging that.

You HOPE they're not adjusting the tip.

That only leaves the delivery pay. You cannot have this pattern if they aren't adjusting delivery pay based on the tip amount.

WHY would they do something like this?

I don't know. It makes no sense.

Seriously, WHO would come up with this idea: Hey, we should make sure that total payout is always ending with .00 to .15 as the last two digits.

Why would you do that?

But here's the weird thing: In all the payments I looked at, the distribution was fairly even.

It's not like you had 150 deliveries ending in .00 and the others are scattered.

The pattern tells me it's random. No one two-digit combo was dominant.

My theory: It's a weird computer thing.

It's the 00 to 15 thing that makes me think it's like a weird computer programming after affect.

There's a hexadecimal thing going on here. Computers often process on a base-16 system. It just fits better with how bits and bytes work than our 1 through 10 numbering system.

What I mean is, deep inside the computer, it's looking at numbers as 0 through 15. In fact all data is somehow broken up into a 0 through 15 system.

Look familiar?

And so somehow, Grubhub's computer system has something wonky going on that seems to be putting out the final two digits in a 16 base system instead of a 10 base. It's defaulting at 0 through 15 instead of 0 through 99.

Why? Who knows?

But when you look at everything else in the pay breakdown, it doesn't do that anywhere else. The dollar portion (left of the decimal) appears to be correct. Mileage and tips are fairly random in the final two digits.

Here's my guess. The computer's calculating the delivery pay. Something wonky in the programming is taking the last 16-base number (00 through 15) and putting that into the last two digits of the payment field. But now everything doesn't add up. Instead of fixing the problem with the last two digits, maybe it ended up being easier to recalculate the delivery fee so it all adds up.

Just a hunch. But I can't think of any other explanation that makes any sense.

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. I've noticed that when that happens, it's often in an unusual circumstance, such as:

  • On a second order in a stacked order. The first order fits that 00 to 15 range, the other is in the 00 to 99 range.
  • On an order that appears to be manually dispatched. There's a long explanation to that which has to do with a pattern in the offer times in the order history. Orders seem to go out every 2 minutes, and whenever an order doesn't fit that pattern, that order also doesn't fit the 00-15 pattern either.
  • It almost always happens during the extremely busy delivery times.
In busier time periods (lunch and dinner) the percentage of orders that had normal .00 to .99 payouts increased substantially.

The way I understand the dispatching is, the computer tends to run on auto pilot for the most part in sending out offers. But then there are individuals who will also manually send out orders to drivers, especially when things are really busy. That way they can pay attention to orders that are starting to get really late.

Ever get a call from Grubhub asking you to take an order? That's what's going on.

Again, another theory here, but it seems like it's whenever someone physically gets involved in getting a delivery out, the payout seems more likely to involve a 00 to 99 cent range. When the computer is left alone, it's the 00 to 15 cent range.

Is there any significance in this?

The problem is, Grubhub decided to quit being transparent in how they calculate the delivery fee. There still seems to be a formula but they won't tell us what it is.

So without knowing that, it's hard to say whether we're being paid more or less because of whatever it is causing this weird pattern. Is the computer rounding up and down on something? Is Grubhub just shaving a certain amount off every order to get DOWN to that range? Or do they pay more at times?

You're probably not surprised that I don't trust Grubhub. I lean towards thinking they're shaving some money off the delivery fee. These things seem to always go in Grubhub's favor, don't they?

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 independent of the tip amount. 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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