In a late-night Tweet, DoorDash CEO Tony Xu announced that a “new model” is coming for the delivery app’s tipping policy — one where customers’ tips go directly to the driver, aka Dasher. The previous policy used tips to subsidize Dashers’ base pay but did not let them keep the full tip.
Details were sparse in Xu’s Tweet, but he hinted that the changes to DoorDash tips will more closely mirror the policies of other popular delivery apps.
4/ 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. We’ll have specific details in the coming days.
— Tony Xu (@t_xu) July 24, 2019
In a follow-up blog post explaining the changes, Xu wrote that “we thought we were doing the right thing for Dashers,” regarding the old payment model, but recent backlash made him reconsider. Starting in September 2019, Dashers will receive 100% of a customer’s tip and an increase in base pay per order.
In addition to the changes for Dashers, customers may now choose to tip before or after the delivery.
Xu’s announcements followed a New York Times article, where reporter Andy Newman documented his experience delivering food with DoorDash, Caviar, UberEats, Postmates and others. Newman went all in on app-delivery for a few days and averaged about $10 an hour, which is $5 less than New York City’s minimum wage.
Newman’s article stoke outrage from DoorDash customers — not drivers.
How DoorDash Tips Get Distributed
Newman’s article highlighted that under DoorDash’s old policy, a customer’s tip went toward the driver’s guaranteed base pay per delivery. For example, Newman wrote that he accepted a delivery that guaranteed him $6.85. His customer tipped him $3 through the app, but his payout stayed the same.
Most customers, it seems, assume that their tips go directly to their drivers and grew upset at DoorDash’s lack of clarity.
The problem, according to a DoorDash spokesperson, is that drivers prefer the status quo. Newman wrote that, despite tips not going directly to him, the money was better on DoorDash.
“I did typically earn more on orders for DoorDash than for Uber Eats and Postmates,” he wrote.
Dashers took to online groups on Facebook and Reddit to discuss their concerns about the changes to DoorDash tips. Their reactions were mixed.
“I think most people who disliked [the old] system are people who don’t understand that this system is more consistent for drivers and shelters us from the bad tips and stiffs,” said Angelo Scaccianoce, an Ohio-based Dasher. “Now we’ll likely see guarantees go down and have to pray for tips.”
Other users say it’s not that simple, and that there are a variety of factors that go into the base pay of each delivery. The changes will likely affect rural and urban Dashers differently, which is a hurdle most delivery apps are already dealing with.
The details of the new plan, laid out in Xu’s blog post, seem to take these issues into consideration.
“To help offset some of the variability in this new model, DoorDash is increasing the amount that we pay on average through base pay and bonuses, which will increase overall Dasher earnings,” Xu wrote.
Depending on location, proposed duration of the delivery and an order’s “desirability,” a Dasher’s base pay will range from $2 to more than $10 under the new payment system.
How Delivery Apps Handle Tips
Most delivery apps, but not all of them, offer a base pay per order in addition to drivers keeping 100% of their tips. Here’s the breakdown.
|Do drivers keep 100% of tips?||When do you tip on the app?|
|Bite Squad*||No||During checkout, before delivery|
|Caviar||Yes||After delivery (within two hours)|
|DoorDash||Yes (starting Sept. 2019)||During checkout or after delivery.|
|Grubhub||Yes||During checkout, before delivery|
|Uber Eats||Yes||After delivery|
|Postmates||Yes||After delivery. Can’t place new order without tipping or snubbing|
*Note: Bite Squad subsidizes its drivers’ base pay through tips, but Bite Squad is the only delivery app listed here that considers its drivers as W2 employees, not independent contractors. Its workers get basic protections like workers comp.
How Much to Tip Delivery Drivers?
Twenty percent or $5, whichever is more. Full stop. Because some apps add hidden delivery fees into the final amount, it’s OK if you’re calculating 20% of the subtotal, according to many etiquette and food guides. If it’s a difficult order with difficult instructions, or if it’s raining, snowing or deathly hot outside, tip more.
And if you’re hazy on the tipping policies of each delivery app, there’s a simple solution that also allows you to adjust the tip based on the quality of service: Tip in cash.
Your driver will thank you.
Editorial note: This article was updated on Aug. 26, 2019 to reflect new details about DoorDash’s tipping policy.
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.