Remember how Instacart workers forced the company to change their pay model after they revealed how the company was only paying people 80¢ an hour, and covering the rest of their pay in tips?
Well it turns out DoorDash is doing the same thing — except they’re paying 20¢ more. So uh 🎉
Here’s the shady way it works.
For any given job, DoorDash offers a “guarantee” of what a worker will get paid for that delivery. That guarantee is based on a black-box algorithm that supposedly considers factors like time, distance, number of items, and more. That guaranteed amount *includes* tips. And DoorDash’s portion of that guarantee is as little as $1.
That’s right. DoorDash promises to pay just $1 for any given job that comes from their own money. Past that one dollar – literally, one single dollar — the more the customer tips, the less DoorDash pays. They just replace pay with tips. And despite how much they like to say “transparency”, they don’t even actually show workers how much pay is coming from the company on a given job, and how much is from the tip.
It gets worse. For customers, DoorDash selects a default tip — generally 15%. The app tells customers that “100%” of that tip goes to the worker. But DoorDash itself has admitted that selecting a 15% tip doesn’t change the workers’ pay by a penny. It just replaces what DoorDash would have paid. The customer could tip $0 in-app, and the worker would get the same amount. DoorDash would just pay more.
The customer is tipping DoorDash.
DoorDash just raised $500 million from Silicon Valley venture capitalists, and they’re valued at $7 billion. Meanwhile, they value workers’ time at $1.
And they treat customers’ tips as a gift to their bottom line.
Here’s their worldview, according to Fast Company :
In its ideal world, food-delivery service DoorDash would pay its contractors almost nothing–relying on customer tips to cover most of the fee quoted for a job. In the real world, conditions are usually not so ideal, as DoorDash reveals to Fast Company, for the first time disclosing the share of driver payments that come via tips from users.