Delivery drivers for a contractor serving companies like Walmart say their tips are reportedly being stolen to cover part of their guaranteed wages

• Point Pickup is siphoning tips to go toward paying drivers' guaranteed wages, Motherboard reports.
• The delivery contractor, which works with retailers like Walmart, has reportedly denied the claims.

A delivery contractor that works with retailers like Walmart and Kroger has reportedly been stealing some of its drivers' tips and using the money to help cover the workers' guaranteed wages instead of adding these tips on top.

The company, Point Pickup, had previously separated payout amount and tips, but recent changes to the app are leading to a portion of tips going towards drivers' guaranteed pay instead, Motherboard's Lauren Kaori Gurley reported Wednesday.

Point Pickup covers most of drivers' earnings when they receive small tips but foots a smaller share of the bill for their work when they get bigger tips from customers, letting the tips subsidize their pay, according to Motherboard.

Several Point Pickup drivers told Motherboard their pay dropped significantly following the changes. One driver in Azle, Texas, told the outlet she is losing at least $400 per week under the new pay model.

"I am a widowed mother of a 22-year-old disabled daughter," she told Motherboard. "This is my full time job. I depend on it."

Since they're considered independent contractors, Point Pickup's delivery drivers, like many others, don't get things like healthcare or overtime pay through their work.

Point Pickup told Motherboard it updated its app on Monday to reflect that guaranteed payouts now include base pay, extra pay, and tips, noting that the recent changes entailed "publishing a guaranteed rate prior to drivers accepting orders (includes base rate + projected extra pay)."

"Drivers were confusing the guaranteed rate for the fixed base rate (just a portion of the guaranteed rate)," the spokesperson told Motherboard. "The confusion led drivers to believe that we were taking some of their tips. This is not true. DRIVERS HAVE ALWAYS RECEIVED AND WILL CONTINUE TO RECEIVE 100% OF THEIR TIPS."

Point Pickup did not respond to Insider's requests for comment.

The company's customers include names like Walmart, Sam's Club, Kroger, Publix, and Albertsons, though some do not permit tipping, a Point Pickup spokesperson told Motherboard.

"Walmart passes 100% of tips to delivery providers for them to distribute to their drivers," a Walmart spokesperson told Insider.

Point Pickup isn't the first company that drivers have said stole tips from them.

DoorDash has come under fire for using tips to help cover a worker's guaranteed minimum pay for an order, and it paid $2.5 million last year to settle a lawsuit over this "deceptive" tipping model.

Amazon illegally withheld roughly $60 million in tips from 140,000 Flex delivery drivers between 2016 and 2019, according to the Federal Trade Commission. Drivers have started receiving checks for the withheld tips, with the highest payout to a single driver coming out to more than $28,000.