Objections 6. There was a delivery charge / fee. The delivery charge is not part of the driver's tip. This is a hidden fee that goes to the store, another way the store can make money with the appearance of low prices. It pays for the increased cost of ingredients, hourly wages, insurance, and other internal business operating expenses. The cost of ingredients rises sharply when gas prices climb. In addition, shipping food to stores is more expensive. The high price of gas trickles down to all levels of business and eventually to the customer. The pizza company did not have drivers in mind when they wanted to cover gas prices. They know drivers depend on the kindness of customers. The company wants to cover itself. It was misleading to call it a "delivery" charge. It should be called an "inflation surcharge" or something along those lines. Stores are reluctant to simply raise menu prices due to an intense price war with the pizza competition. The above is true for large chains like Pizza Hut, Domino's and Papa John's. The driver does not benefit from the delivery charge. It is a price increase in disguise. For etiquette, the tip is based on the bill amount after the delivery charge. Most national chains give about 20% of the delivery charge to the driver in the form of mileage reimbursement. That's not the tip. This compensates drivers for gas and maintenance for using their personal car. It brings the driver back up to minimum wage or sub-minimum wage, at best, but usually the driver loses out. It is a pitiful amount. Most mileage rates are less than half the IRS standard rate of 58.5 cents per mile. Stores usually reimburse between 75 cents and $1.25 per delivery. If a Pizza Hut driver takes a single run (they typically insist on singles only) to the average distance in the delivery area, the mileage rate is only 15 cents per mile or about 1/4 the IRS rate. (This is based on 75 cents per delivery. Divide 75 cents by the sum of 2.5 miles out and 2.5 miles back and it equals 15 cents per mile. Then 15/58.5 = 26% of the IRS mileage rate.) A single delivery to the edge of a 5-mile radius pays 7.5 cents per mile. Almost no store has a delivery radius smaller than 5 miles. Most are 5, 7, or even 10 miles. Tips are sadly needed to help with mileage reimbursement. Even if there was a mileage rate that reimbursed for the total cost of operating a car, it would still be worthless to deliver pizza without tips. You would break even at minimum wage. Any indoor job pays at least that much and does not wear down your car. An indoor job has no bad weather and no risk of traffic accidents. Tips are the only thing that makes the delivery job worthwhile. Delivery charges are relatively new in the pizza industry. They first gained momentum in 2001. Before that time, pizza stores compensated their drivers for vehicular costs with a per-delivery mileage rate. They paid for this by dipping into the store's sales. Today they do the same thing, except part of their sales comes from the delivery charge. There was no mileage rate increase when stores began the delivery charge. Some stores might have raised mileage by 5 or 10 cents when they began a $1 fee, but most did not raise it at all. By 2007, when they raised the fee to $2, they raised mileage by another 5 or 10 cents. The store might claim the delivery charge goes to the driver, but this is not true. Instead, this is very typical of what really happened. The store originally paid drivers a $1 mileage rate with no delivery charge. Then they added a $1 fee without increasing the mileage rate. Since both amounts are the same, some people presume the $1 fee must go to the driver. Not so fast. That is a $1 bonus for the store. The driver does not benefit because the mileage rate stayed the same. I notice the new employees tend to make this blunder as they don't know the history. They assume there was no mileage rate when there was no delivery fee. What a horrible mistake. There would have to be a simultaneous increase in the mileage rate before you could honestly claim the fee goes to the driver. The delivery charge does not benefit the driver. In fact, due to many misled customers, it steals from our tips. In some independent stores, the delivery charge covers the driver's hourly wage. This is not the tip. This is the minimum wage base pay before tips. See our statement about the Domino's $1 delivery charge. They were test marketing it at the time. Last updated: August 6, 2008 return to top