Friday, June 27, 2008

6-27-08: The Economics of Tipping the Pizza Guy

For a few years, starting my senior year in high school and continuing during school breaks in college, I worked at a small, non-chain pizza shop. It was an interesting job, with interesting people. Most of the job involved delivering food to customers. It didn't pay too well most of the time, unless I was tipped well. Then, money could be pretty decent. The only real highlight was that I could listen to baseball games on the radio while working. That wasn't too bad. Free food helped, too.

Delivering pizza is a dull job, and can be more strenuous than you think. Over time, you get better at it. You just need to learn the routine and memorize the major roads in town. My pizza shop delivered to three towns, and covered quite a substantial area for a rural/suburban setting. During hot weather it could be pretty brutal, and traffic could suck. Most of the drivers gave it their all to get to the house as quickly as possible.

The most frustrating part of the job was when drivers weren't tipped because the customer assumed it was the driver's fault that an order arrived later than anticipated. The employee taking the order over the phone usually gave an estimated time of arrival, and sometimes they weren't paying attention and would day "30-35 minutes," when it was obvious that most of the orders weren't leaving the store until 30 minutes after being called in.

I was a driver who also took orders when I wasn't on the road, so I defended my fellow drivers. I would go so far as to call the customers of any late orders (which were quite common during busy times) letting them know that the driver had just left with the order. The employees who worked the phones and didn't drive didn't get it and frequently asked why it was such a big deal. I always gave the "getting stiffed by the customer is a really bad time" sort of response. My boss, the owner, also didn't get it sometimes, and would deliberately tell those taking phone orders to limit the time. I think he thought customers would rather hear a shorter time of delivery than an honest one. It didn't cost him anything. It only cost the drivers.

So, here are the economics of why you should always, always tip the driver (unless of course he is outwardly rude to you):

First, most drivers rely heavily on tips. Most don't get paid per delivery, and receive a meager hourly wage. Tips are everything.

Second, they're taking food from the store to your home. They are showing an effort. They usually have to look at a map, figure out the best way to get there (sometimes making multiple deliveries), find your house (which can be quite difficult if you decide not to put a number anywhere), and fight traffic on the way over.

Third, gas is expensive. When I stopped delivering pizza, it was ~ $2.25 per gallon. It's twice as expensive now, and that was less than three years ago. It's getting to a point where it is costing drivers money to make a delivery if they get stiffed.

Most importantly, if you do not tip the driver, it can become a problem for all parties involved.
Let me give you a scenario from my experience:

I was on a delivery to a house that was difficult to find. There was no number on it, and I drove by it a couple times before finally correctly guessing it was the house I was looking for. I was maybe 5 minutes later than anticipated, mostly because the delivery was the second one made on a two-delivery run. The customer, for whatever reason, decided to point that out, and said they weren't going to tip me because "I could have picked it up myself in less time." My response, knowing full well I wasn't going to get anything out of it, was simply "That's probably true. Sorry to waste your time."

Economics is all about incentives. What would my incentive be to hustle more the next time I made a delivery to that house? Not much, knowing if I was even a minute late it wouldn't matter. So, what ended up happening was, whenever a delivery order popped up to that house, I always made sure that house was on a multiple-delivery run so as to not waste my time and effort. It's a form of spreading the risk. That house was a known risk. The other house on the delivery run might not be so bad, so I gave them the benefit of the doubt and always went there first. The result was often that I got to the house later than usual, and was either stiffed or tipped poorly. If that customer was lucky enough to get me on the phone when the order was made, I always mentioned how the delivery times would be long that night (even if we weren't exactly at our busiest), and suggested that it might take less time for them to get their food if they came in. They always, sarcastically, said "No thanks, I'd like it delivered." That was just ammunition for me when the one time I took the order and delivered it, when they gave the same "It could have taken me less time to pick it up myself." My response then: "Sir, I took the order. I gave you the option, letting you know full well it would take a while. You still said no. This time, it's your own fault. Thanks for the $1.50. Have a nice day."

The guy stared at me while I walked away and said "I'm going to call the manager!" I stopped, turned around, and said (honestly): "Sir, I am the manager for tonight. I'll call you back when I get back to the store and read the message."

They never called again.

You might ask "So where are those economics you hinted at earlier?" Here you go:

- Stiffing me the first time pissed me off and made me re-order my delivery priorities. I had no incentive to get to that house earlier.
- Continually stiffing me, and consequently being disingenuous, led me to prove to the customer that they were actually just lazy.
- Stupidly pointing out the customer's own laziness (hey, I'm only human) caused them to not order from the pizza place again.

So, you see, it cost all parties involved in the end. The funny part is, the exact opposite scenario is more common. Good tippers got special treatment from drivers. Their orders went out earlier, got there faster, and the drivers were often very friendly. Those customers, in turn, were often happier, and were more likely to order food from my pizza place.

In summary, always tip the pizza guy. Or, do what I do, and pick your order up. I do that because I don't trust delivery guys after experiencing the hell they sometimes go through to get the food to your door.

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