A month ago, facing widespread criticism over DoorDash’s policy of reducing pay to delivery workers who receive tips, DoorDash CEO Tony Xu promised to introduce a new payment scheme in which delivery workers could keep their tips without seeing their pay reduced. Now that new model is here, and it’s a powerful incentive for customers ordering DoorDash deliveries to add a tip when they order. Preferably, a generous one.
Under the old system, a DoorDash delivery person (or “Dasher”) would be promised a certain fee, say $7, to make a given delivery. If the customer tipped zero, DoorDash would pay $7. If the customer tipped $3, DoorDash would pay $4, and the Dasher would still receive a total of $7. (If the customer tipped more than $7, DoorDash would pay its minimum fee of $1, and the Dasher would keep the entire tip.)
According to some accounts, the majority of customers who use a food delivery service such as DoorDash don’t tip–perhaps believing that most of the fee they pay to the service goes to the deliverer–while others do tip. Thus, the old system created greater predictability for drivers when deciding whether to accept a delivery. (Dashers are independent contractors who accept or decline each delivery as they see fit.)
Some Dashers liked that model, and New York Times reporter Andy Newman, who spent several days as an undercover deliverer for DoorDash, PostMates, and Uber Eats, found that he generally earned more from DoorDash than from the other two services. There was just one problem with that model, which Xu identified in a series of tweets announcing the change: “What we missed was that some customers who *did* tip would feel like their tip did not matter.”
Want your food to arrive hot? Add a big tip.
Well, it’s about to start mattering big time. The new model is short on essential details, but this is what DoorDash has announced: From here on out, all Dashers will keep 100 percent of their tips and DoorDash will no longer reduce their base pay when they do. Xu has vowed that the new scheme will increase Dashers’ pay overall, and to that end the company is doubling its minimum pay from $1 to $2. The company is adding “promotions,” bonus pay for Dashers to work at busy times, and also “challenges,” in which Dashers who work frequently will receive extra pay for reaching certain goals. DoorDash has not yet released the details of these promotions. It also says the new payment system will roll out to all Dashers by the end of September.
The company has made one thing very clear. DoorDash will give every Dasher 100 percent of the customer’s tip without reducing the Dasher’s base pay, and if a customer adds a tip when placing the order that tip will be included in the pay offered for the delivery. Although the Dasher won’t be able to see the tip amount, he or she will be able to see the total payment for the delivery, including the tip, which obviously will be higher than for an untipped delivery job.
Thus, if a customer ordering a DoorDash delivery adds a big tip when ordering, Dashers will likely scramble to grab that delivery job, knowing it will pay better than usual. Conversely, customers who doesn’t add an upfront tip will likely wait a bit longer for their food to arrive since those jobs will be much less attractive to Dashers. A customer may be planning to tip after the food arrives, but since the Dasher can’t know that in advance and most customers don’t tip, he or she won’t bank on it.
That’s what many people who posted in a Reddit forum for DoorDash drivers are saying. For example, one Dasher posted, “The nice part about this is that you will be able to see what the customer tips up front before accepting the order so those big fat 0 tippers even if they’re gonna tip afterwards I’m not risking it.”
And here’s a comment from another Dasher: “My thinking also is that the low-paying offers (from non-tippers) are going to be passed over repeatedly, so the food may be cold and will arrive late. So not only is it a low-paying job, but the odds are likely that you’ll get 1 star for taking the order. Wow, sounds great, huh?”
For the moment, there are more unknowns than knowns about this new payment scheme, but one lesson is clear. If you’re ordering food via DoorDash and you want it to arrive hot, add a tip when you first order. Preferably a big one.
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