The recent settlement between New York and a restaurant operator highlighted a darker side to online ordering according to an article by Peter Romeo in the Restaurant Business Online.
The entry of online ordering businesses such as GrubHub, Seamless and Delivery.com, has been welcomed by New York City's busy population, along with the accompanying delivery services of course. Since payment is cashless, most customers also include their tips in their online payments. Of course, customers were expecting that these tips were to be passed on to the actual employees who delivered the food or other items to the customers' residences.
However, Wallace Lai, a New York City operator, admitted that he kept the tips that were charged to the credit cards of his customers when paying off the delivery of their orders. It was found that Lai actually did not forward any of the tips for deliveries coursed through his two Hong Kong stations for the period of May 2014 to January 2015, according to Eric Schneiderman, a New York Attorney General.
The settlement amount of $15,000 collected from Lai will be used to compensate for the 10 delivery men who did not receive the tip that was rightfully theirs to begin with, along with any wages or overtime pay.
Schneiderman expresses disgust with the practice, saying "It is outrageous that a business would cheat its workers and hoodwink customer by keeping tips that are meant for these hardworking employees."
This reminds one of the practice by UK's most popular restaurants of collecting a percentage out of their worker's tips. According to Simon Neville's article in the Independent, Pizza Express found itself in hot water last year when it was reported that the food company charged an 8 percent "administration fee" from the tips. However, the same article revealed that it was not only Pizza Express taking cuts from the tips of its employees. Big restaurant chains such as Ask Italian, Belgo, Bella Italia, Cafe Rouge, Giraffe, Las Iguanas, Prezzo, Spaghetti House, Strada and Zizzi were reported to ask admin fees as well.
