No, Doordash isn’t stealing your tips.
At least not technically. But you can’t blame drivers for getting that impression.
The Doordash Pay Structure
Doordash’s pay is at the same time very simple and very complicated. A lot of drivers feel like Doordash is cheating them. Doordash says their pay model “is designed to make pay for every delivery fair and consistent.”
So who’s right?
Not very helpful, is it? I’m not sure there’s a right answer. The best thing I can think of is to just delve into how Doordash pays, and then we can draw some conclusions.
The Simplicity of the Doordash Pay Structure.
A quick disclaimer – this is as of the date of this posting, January 2019. If and when they change their pay model, this will become immediately obsolete, but as of today, this is how they pay.
From the Doordash Pay Model FAQ: “For each delivery, you will always receive at least $1 from Doordash plus 100% of the customer tip.”
It’s that simple. $1 plus your tip. If the customer didn’t tip, you get at least a dollar. If the customer tipped $10, you get at least $11.
It’s really very easy. THAT is their pay structure. Other providers have formulas that include pickup fees and distance, maybe waiting or drive time.
The problem is, if you want to get drivers, the last thing you want to do is advertise “we will only pay you a dollar ourselves.” That’s why this is buried deep in an FAQ page.
The Complexity of the Doordash pay model
If you are Doordash and you only pay a dollar for deliveries, how do you get people to deliver for you? No independent contractor (meaning YOU – the boss who has the freedom to make these decisions) in their right mind is going to take a delivery for a dollar. You’ll go broke doing that.
So how do you make sure that deliveries are going to be picked up and delivered by drivers who have no legal obligation to accept deliveries if there’s a risk they will only pay a dollar?
Enter the guaranteed amount.
Doordash calculates a guaranteed minimum, and THAT is the amount they show drivers when offering a delivery. “The guaranteed amount is based on a variety of factors including the size of the order, whether you have to place the order in person, and the projected driving distance, traffic, parking, and wait time at the store.”
I had a support person tell me once there are 53 different factors they use in calculating their guaranteed amount. Sounds like Heinz ketchup. Doordash doesn’t tell you how they calculate things. They don’t make their formula public like Grubhub and Ubereats and others. Sometimes there doesn’t seem to be any rhyme or reason how they figure it out. I’ve seen quick and easy deliveries for $9 and long complicated deliveries for $6. For all we know they’re just pulling a number out of thin air, or using a random number generator when deciding what this guaranteed amount is. In each market there’s a minimum, such as in mine the minimum is $5.50.
So there are two pay models? Which one do I get?
You get which ever one is the most.
That sounds good in theory, right? That’s why they spin it that way.
If the total of your tip plus $1 is more than the guaranteed amount, you get that. If the guaranteed amount is higher, you get that.
If someone tipped $10 in the app and the guaranteed amount was $6, you get paid $11 ($10 tip plus $1). If the guaranteed amount was $6 and the customer was a jerk and tipped a penny, you now get the $6 because that is the higher amount.
On the surface, that almost sounds fair and consistent, as they say. And to be honest, there are a lot of times you’ll find that’s not that bad a deal. The good thing on this is that you’re not left out in the cold if a customer chooses not to tip. The $5.50 or more that I would get through Doordash when a customer doesn’t tip is usually a lot more than what I would get from other apps (who have minimums between $3.25 and $4 in my market).
The problem with the model is what happens when people DO tip, which is far more often than not.
And this is why a lot of drivers feel Doordash is stealing their tips:
I did an experiment the other day. I already knew the answer but wanted to verify it. I placed two orders through Doordash from the same restaurant less than a mile away. On one I put a $4 tip in the app (wasted money – more on that later). On the other, I didn’t tip in the app.
Both drivers received the same pay for the delivery. The driver that I tipped $4 got $5.50. The guaranteed minimum was $5.50, so that was more than the $4 plus $1. The driver that I didn’t tip actually got $5.95 (I’ve seen evidence that they do factor drive distance TO the restaurant into their formula, so that’s why I’m guessing they got more).
I did give both a cash tip, as an FYI.
But here’s the deal, and this is why people conclude that tips are being stolen: The driver wasn’t tipped was paid more by Doordash than the driver that was tipped through the app for the same exact delivery!
It’s kind of hard to explain that one away if you are Doordash.
Now like I said, technically, they didn’t steal the tip. From their perspective they paid both drivers “at least $1 from Doordash plus 100% of the customer tip.” They gave the first driver the $4 tip plus the $1, and then a 50 cent boost to make up the guaranteed minimum. They gave the second one the $1 and then a $4.95 boost to make up the guaranteed minimum.
So yes, technically, the driver did receive 100% of the tip. It’s just that one driver received a lot more from Doordash than the other. And in the end, the first driver did not receive any more because of my tip.
As a customer, THAT is the fact that would tick me off the most.
Does this mean Doordash is evil?
You have to draw your own conclusions there. I can understand the arguments both ways
I can see why they do what they do. In fact, I’ve seen a lot of drivers in forums who say that companies should provide a subsidy on no-tip offers, and that’s pretty much what Doordash is doing here. They have their $1 delivery fee and if there is no tip, they subsidize the fee up to what they figure the minimum should be. I can see where that can seem fair.
The problem with that explanation is the $1. THAT is the real problem with the Doordash pay model. One. single. dollar. should NEVER be the starting point of the delivery fee from the company.
Put it another way: Say we accept that Doordash is not stealing tips here. The resulting conclusion though is just as bad: They are using generous tips from customers as an excuse for not paying out a reasonable amount themselves.
Look, I can’t really conclude one way that there are bad motives on the part of Doordash. I don’t know them. It may well be that this was their best idea of how to deal with no-tip and low-tip offers. But it does come down to a choice between either being evil or just really dumb. If the motivation is to use tips to get out of paying drivers, that falls on the side of evil. If that wasn’t the motivation, it falls on the side of dumb because the way they structured it gives every appearance of evil. I don’t know which, and probably in the end it does’t really matter.
The Most Important thing in this discussion is: How do we use this information to help us?
First off, if you ever order from Doordash, tip in cash. If you want your driver to come away with more, tip in cash.
At the same time, if you ever were to not feel like tipping: Use Doordash. At least then the driver doesn’t get hurt as much.
But as drivers – how can we use this information? Here’s a couple thoughts:
- Start by knowing what it is and moving on. If the pay structure is a deal breaker for you, I get that. There’s nothing wrong with refusing to drive for Doordash because of this.
- If you decide that Doordash deliveries can still make sense, as I have, then put your energy into what you can control and not fretting over what you cannot control
- Understand when taking a delivery that the minimum amount they offer you may well be all you will get, and choose accordingly. Doordash actually provides the best information about a delivery including total miles to and from the restuarant. If it’s a 12 mile run and a $6 guarantee, you know you’re losing money on that deal. If it’s a 3 mile run, it could make sense even at the guaranteed amount.
- Pay attention to who the offer is coming from and how many items. Look for orders that look like the value of the food is higher, which is more likely to have a larger tip. A combo meal from Burger King probably won’t have a big tip, but a larger meal from a nicer restaurant is far more likely to have a larger tip and giving you a larger payout than your guarantee.
There are problems with Doordash and their pay model. But here’s the thing: there are problems with all of the platforms.
The most important thing when looking at all of these is to remember who the boss is! YOU are the boss. You, as the boss of your own business, have the right to choose what opportunities to pursue and what to leave behind. And you can choose what to dwell on.
There are a lot of deliveries where you don’t get paid any more when the customer tips than when they don’t. That fact alone, in principle. may be enough for you to say you want nothing to do with Doordash. That’s okay, that’s your decision and you’re the boss.
Or you might feel like okay, I can put that aside and just look at the opportunities that come up, that the delivery they are offering me fits nicely into the amount of money I want to make for the time and effort I have to put into it and, issues or not, it’s worth it. That’s okay too, it’s your decision and you’re the boss.
I think what I’m getting to is, some of how they do their pay doesn’t seem right. It’s skewed and at the very best looks shady. You can dwell on that. Or you can take control. You make your decisions based on what works for you, not on what someone else is doing. Because (repeat after me) You’re the Boss.