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Illustration: Aïda Amer/Axios

DoorDash dominated more of the news cycle than it should have this week, after an NYT article brought broad awareness to its idiosyncratic policy on tips. The company would give its "dashers" a guaranteed minimum fee for delivering food; that minimum included any tips. The result was that most tips ended up going to DoorDash rather than to the delivery workers.

Driving the news: After defending the policy as recently as last month, DoorDash CEO Tony Xu backtracked on Tuesday, tweeting, "Going forward, we’re changing our model - the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order."

The big picture: Americans encounter disaggregated prices every day. Retailers operate under a convention that prices exclude sales tax, so it's never entirely clear how much something is going to cost in total.

  • The implicit convention is that disaggregated prices reflect real-world allocations. Sales taxes go to the government; tips go to servers. The DoorDash backlash came because it violated that convention and effectively kept customers' tips for itself.
  • Ticketmaster catches flack for similar reasons. The various fees it tacks on seem fake, designed primarily to hide just how much tickets really cost.
  • Buying a car from a dealership is an experience fraught with countless fees and taxes, all of which inflate the total cost of the vehicle far above its headline price.
  • Airlines and hotels are also expert at luring in customers with low advertised prices, only to surprise them with a raft of unexpected fees.
  • Banks make billions of dollars in fees; some, like Aspiration, even set their stated price at zero and make the bulk of their revenue from “tips.” Lender Earnin does the same.
  • Even auction houses selling multimillion-dollar artworks play this game, artificially breaking the final price into a "hammer price" and a "buyer's premium." Buyers bid on the hammer price and can then find themselves on the hook for millions of dollars extra.

Why it matters: Budgeting and spending decisions become much more difficult when all-in prices are mostly invisible. Retailers who disaggregate their prices end up selling more, even as their customers trust them less.

Go deeper

Asymptotic Florida students exposed to COVID no longer have to quarantine

Florida Gov. Ron DeSantis during a September news conference in Viera, Fla. Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

Florida Gov. Ron DeSantis (R) announced Wednesday an emergency order allowing parents to decide whether their children should quarantine or stay in school if they're exposed to COVID-19, provided they're asymptomatic.

Why it matters: People infected with COVID-19 can spread the coronavirus starting from two days before they display symptoms, according to the CDC. Quarantine helps prevent the virus' spread.

Federal judge: Florida ban on sanctuary cities racially motivated

Florida Gov. Ron DeSantis. Photo: Joe Raedle/Getty Images

A federal judge on Tuesday struck down parts of a Florida law aimed at banning local governments from establishing sanctuary city policies, arguing in part that the law is racially motivated and that it has the support of hate groups.

Why it matters: In a 110-page ruling issued Tuesday, U.S. District Judge Beth Bloom said the law — signed and championed by Gov. Ron DeSantis (R) — violates the Constitution's Equal Protection Clause because it was adopted with discriminatory motives.

Biden steps into the breach

Sen. Joe Manchin heads to a meeting with President Biden today. Photo: Kevin Dietsch/Getty Images

President Biden ramped up the pressure on his fellow Democrats Wednesday, calling a series of lawmakers to the White House in the hope of ending infighting and getting them in line.

Why it matters: Divisions within the party are threatening to derail Biden's top priorities. After several weeks of letting negotiations play out, the president is finally asserting his power to ensure his own party doesn't block his agenda.