DoorDash announced Tuesday it would change its tipping policy that caught pushback earlier this month that allowed the company to take their riders’ tips.
What We Know:
- The New York Times revealed in an article Sunday that DoorDash uses tips as part of their riders’ minimum earnings for each delivery; The company’s Pay Model never allows the deliverer to earn more than the minimum guaranteed amount per delivery with DoorDash, which the company says is calculated by the “estimated time and effort required to complete that delivery.”
- Each employee sees this guaranteed minimum before they accept a delivery; Should the person receiving the order decide to tip, the company uses the tip towards paying that minimum rather than allowing the employee to keep the tip on top of the guaranteed minimum.
- Chief Executive of DoorDash Tony Xu announced Tuesday the company will change the policy to allow Dashers’ earnings to “increase by the exact amount a customer tips on every order.” The policy has not officially begun and Xu said the company will announce more details in the coming days, though Xu also defended the company’s standing tip policy.
1/ After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible.
— Tony Xu (@t_xu) July 24, 2019
- Though DoorDash has faced pushback on its controversial tipping policy in the past, this most recent New York Times article inspired customer complaints and a larger cultural discussion about jobs and fair pay in an electronic economic market.
- “I don’t believe that a single person intends to give a tip to a multibillion dollar venture-backed start-up…They are trying to tip the person who delivered their order. This deceptive model should be illegal.” Tech journalist Louise Matsakis said.
- With over 400,000 delivery workers the company is valued at $7.1 billion this year. DoorDash is now the top on-demand food delivery service, topping former market leader GrubHub and controlling 27.6 percent of the market. All other major food delivery services allow workers to keep 100 percent of their tips.
Though many customers feel this policy change is a win for DoorDash workers, employees worry the new policy will only allow Doordash to make up for the lost tip revenue by lowering guaranteed minimums.
