Doordash does not pay for gas for their delivery drivers. Doordash drivers are paid by the delivery. As independent contractors there is no gas reimbursement.
That's the economic reality of being an independent contractor delivering for Doordash. The more important question is, can you make enough as a Dasher to have enough money left over after your gas purchase?
Is it fair that you have to get your own gas? Shouldn't they do more for Dashers? Does it make sense to keep delivering when prices are so high? We'll look into question like this, including:
- Why Doesn't Doordash pay your for gas?
- What kind of gas relief is Doordash offering?
- Should Doordash pay for gas?
- Does Doordash pay enough to cover the higher costs of gas (and what can we do about it?
- Frequently asked questions about Doordash and gas prices
Why Doesn't Doordash pay for gas?
Doordash delivery drivers are self-employed independent contractors. What that means is that as a Dasher, you are providing delivery services as a business, not as an employee.
When you operate a business, you're responsible for your own expenses. You don't pay the rent or utilities for your favorite restaurant. Instead, you pay for the food, and the restaurant has to cover those costs out of their proceeds.
It's the same way when you deliver for Doordash as a business. Doordash doesn't give you any extra money for the cost of gas, they just pay the base pay and maybe some incentives like peak pay. The customer's tip is added to that, and that money is all given to you as you complete orders.
And now you pay for your expenses out of that.
Doordash can't actually reimburse you for gas.
At least they can't if they want to continue with the independent contractor model.
The thing about using independent contractors is that Doordash can't control the work of contractors. A lot of us prefer things that way because we like being free to make our own decisions on how to make the most we can on Doordash.
So what does that have to do with not being able to provide gas reimbursement? It has to do with IRS rules about whether a company can use independent contractors. When gig companies control the contractor, that's evidence that it should be an employee relationship instead.
I know that doesn't seem to apply here. But when you look at how the IRS defines control, it starts to make more sense. Financial control is one factor. “Are the business aspects of the worker's job controlled by the payer? (things like how worker is paid, whether expenses are reimbursed, who provides tools, supplies, etc.)
This is why Dashers aren't paid a salary or an hourly rate. And it's why there's no reimbursement or payment for gas prices. Pay is on a delivery by delivery basis.
All that Doordash is really allowed to do is pay you for the end result: a completed delivery. As the business owner, it's on you to pay for your gas and other costs out of that.
Doesn't Doordash pay more for longer deliveries? Isn't that paying for gas?
Doordash says they pay more for longer distance and greater time. Here's their explanation of how the Doordash pay model works.
Base pay is DoorDash’s base contribution for each order. This will range from $2-10+ depending on the estimated time, distance, and desirability of the order. Deliveries that require Dashers to travel a longer distance, that are expected to take more time, and that are less popular with Dashers will have a higher base pay. Base pay will not change based on the customer tip amount.
Base pay as described in the Doordash Pay Model page, as accessed on July 9, 2021
They lie.
You cannot tell me that distance and duration factored into a 5.6 mile delivery that pays only $2.00.
In the summer of 2021, Doordash claimed they were starting to pay more for longer distance deliveries. Of course, there was a trade off – they were going to cut the base pay on shorter trips.
It's funny how the notification more or less admitted that the better pay for longer distances as described in their pay model was a bit of a lie:
We believe every order should be worth your time, but up to this point, you were paid similarly for both long distance orders and shorter trips. To make these longer deliveries more worthwhile, we're making an adjustment so you get paid more for longer trips.
Doordash notification about changes to how Dashers in some markets earn.
So if the total earnings are supposed to be based on time and total distance, why have we been “paid similarly for both long distance orders and shorter trips?”
But then by the next summer Doordash pretty much took that all away. I was able to document that by taking several long distance deliveries in June, 2022 and comparing them to a number of trips I did in February and March. Base delivery pay for trips over five miles was cut significantly compared to pay for the same distances just a few months earlier.
Several deliveries of nine miles or more were paying the area minimum. What that means is that Doordash isn't compensating much any more for longer deliveries.
Does Doordash pay for gas in California?
Doordash doesn't pay for gas in California, but the pay structure is a little different there thanks to Proposition 22.
Prop 22, which was passed in California in 2020 in response to AB5 legislation, set up a minimum pay structure for app based workers in California.
If the delivery pay from Doordash doesn't equal a total of 120% minimum wage plus 32 cents per mile for an active delivery, Doordash has to pay the difference. All of that is figured before the customer tips are added.
This is not a reimbursement plan. Instead, it uses distance as a means to figure out the minimum pay a gig worker should receive.
What kind of gas relief is Doordash offering?
When prices took off in early 2022, people wondered. Would Doordash pay more because of higher gas prices?
Doordash did announce a fuel relief program, but by their actions it was more posturing than it was really being helpful. In March they announced their gas rewards program, offering Dashers weekly bonuses of $5, $10 or $15 depending on how far they drove.
In April, Doordash discontinued their gas rewards program but did extend a 10% cash back program for Dashers using the company's debit card (DasherDirect). This was even though gas had higher prices in April than they were in March.
In fact, you could make the argument that Doordash actually took away more from Dashers than they provided by reducing base pay on long distance deliveries.
Should Doordash pay for your gas?
If you are an employee, Doordash should pay for your gas and reimburse other car expenses.
You're not an employee.
Since you agreed to be an independent contractor, Doordash has no obligation to pay you extra.
The good news is, you also have the freedom to say no when delivery offers don't make sense. If Doordash doesn't offer enough to cover your gas costs, other expenses, and time, you can say no.
It would be awesome if Doordash did the right thing and bumped the base pay while fuel prices are up. But since we're using “the right thing” and “Doordash” in the same sentence, don't hold your breath.
Doordash doesn't have a legal obligation to pay more when gas prices go up. But at some point it might make business sense to do so. A lot of the Dasher community are dropping out because of the gas prices. At some point if Doordash doesn't do more, they may not have enough contractors to meet the market demands.
Does Doordash pay enough when gas prices are so high (and what can we do about it)?
As of the end of June 2021, the average U.S. price of regular-grade gasoline was $3.16 per gallon (according to the U.S. Energy Information Administration). By July, the average price was getting pretty close to $5.00 per gallon.
How does a Dasher keep going with prices that crazy? Gas money's harder to come by now.
First, keep things in perspective: A two dollar increase in fuel prices means 8¢ per mile on the average vehicle. With the average delivery being about 5 miles, that's 40 cents per delivery.
If you do thousands of deliveries, that forty cents adds up. Obviously you'd rather have that money in your pocket.
Doordash pay may not be keeping up with the recent spike in gas prices. However, there are a number of things you can do to get more Doordash gas money (and profits) even with high gas prices.
Look for ways to save gas.
You can read more about 62 gas savings tips for Dashers. But here are some basics:
- Find ways to be more fuel efficient
- Look for fuel savings programs like the Upside app (you can read my review of the Upside app here) or fuel rewards programs with grocery stores or gas stations.
- Take advantage of cash back offered by some credit card companies. Doordash is offering 10% cash back on their DasherDirect card at least through the end of August 2022
Increase your price.
You're running a business. Your costs are going up. To keep your profits where they were, you need to make more. For many businesses that means increasing your price.
You might think you can't increase your price because Doordash controls that. You would be wrong.
Yes, Doordash controls what they're offering you. But here's the thing: All that Doordash order is is a bid for your services.
You, as an independent business owner, have the right to set your price by accepting and rejecting deliveries that Doordash offers you. If Doordash isn't offering enough to cover your costs, you can say no.
You should say no. Acceptance rate is nowhere near as important as your profitability. If it costs you more now to delivery, you can set your price accordingly.
Drive less.
Here's the thing: Doordash is paying less for longer trips. Your cost for longer trips is a lot higher.
It's time to say no to those longer deliveries. Shorten up the distance of trips you are willing to accept.
This might require that you reconsider where you deliver. I can give my market (Denver) as an example. Some delivery zones by nature have much longer deliveries. Out in the suburbs, things are more spread out. The central part of town usually has shorter trips.
Deliver more quickly.
Sometimes it's not always easy to get better paying deliveries. However, you can also make more money by getting more deliveries done in a given time. This usually goes hand in hand with shorter deliveries.
One thing I've noticed over the years is that, each year my hourly profits have increased. At the same time, pay per delivery has dropped. How was that possible? I was completing a higher number of orders in the same amount of time. Better efficiency was the best way to get extra pay for me.
Write off your miles
Can you write off miles for Doordash? Absolutely. The IRS allows you to write off 65.5 cents per mile when you Dash. Alternatively, you can claim the business percentage of your actual cost of driving. Make sure that you are tracking your miles. Does Doordash track miles? They don't, so you need to do so. The thing is, it costs a lot to drive, but you can deduct that cost from taxable income to keep your taxes lower.
Consider alternatives to driving.
If you are in a city that supports it, delivering by bike for Doordash might be a great alternative. I often get out with my e-bike for deliveries, and often make close to the same I make using a car.
Expand to other delivery companies.
Remember that a delivery offer is only a bid for your services. If Doordash isn't offering enough to cover your gas expenses and other car costs, someone else might. Consider other food delivery services like Uber Eats or Grubhub. You don't have to quit one to work for the other, there are several ways you can worth them all together.
Frequently asked questions about Doordash and fuel expenses.
Does Doordash pay for your gas?
Doordash does not pay any extra money to Dashers to cover fuel costs. Because we are technically contracted as a business, it is our responsibility to cover our own expenses out of the money we receive.
Does Doordash pay more for longer deliveries?
Doordash claims that they calculate their base pay on distance, duration and desirability. Based on many of the extreme long distance deliveries that pay the same as shorter deliveries, I doubt that. How much money you receive is entirely arbitrary.
Didn't Doordash introduce a new pay model that pays more for longer deliveries?
No. In summer of 2021, Doordash told drivers they would pay more for longer deliveries and in return they were paying a lower minimum. The pay model itself never actually changed, it remained the “$2 to $10 in base pay depending on distance, duration and desirability.” Since that change, Doordash has kept the lower minimum while eliminating the higher pay for longer trips.
Can I use the Doordash red card to pay for gas?
No. Using the Doordash red card for anything other than for customer orders as approved is a violation of the Doordash deactivation policy. It is a prepaid debit card that Doordash loads when you have to pay for an order at local restaurants or merchants, and the card is emptied after completion of the order.
Does Doordash offer additional resources to help with high gas prices?
Doordash introduced the DasherDirect card as a way to receive payments for deliveries. DasherDirect is a prepaid business visa debit card that can receive payment for deliveries immediately after a Dash without cost. One of the original perks was a 2% cash back bonus on fuel purchases, however with the high fuel prices Doordash increased that program to 10% cash back.
Doordash did provide a weekly gas rewards challenge that paid a supplement based on miles driven but quietly discontinued that at the end of April 2022.
Will Doordash continue the 10% Cash Back on DasherDirect gas purchases past August?
It's hard to say. Considering how Doordash dropped the weekly gas bonus rewards program at the end of April without saying a word, there's a good chance of that happening.
Does Doordash charge a fuel surcharge to customers?
Doordash does not. However, they do have a hidden service charge that is added to deliveries that is often from fifteen to eighteen percent. It's buried inside the “taxes and fees.” While they say they won't charge the customers more, they do often adjust that service fee without being noticed by the consumer.
How does Doordash fuel assistance compare to relief programs from other delivery platforms?
In the spring of 2022, Uber Eats, Grubhub and Instacart joined Doordash in offering different forms of assistance. Uber's surcharge was dropped in early Summer of 2022 for delivery, though for ridesharing Uber drivers the surcharge remains. Grubhub was never specific about what they were offering. As of July 2022 Instacart appears to still be offering their 40 cent fuel surcharge to shoppers.
I'm noticing that gig economy companies are also trumpeting that they are helping drivers out with their partnerships with the Upside (formerly GetUpside) app or with Gas Buddy. Those programs are all available to drivers individually.
Is Doordash a waste of gas?
That depends on your profitability. If you are already driving too many miles for what you are paid, it may not be the best way to use your gas or your car. However, as mentioned earlier, two dollars extra in fuel prices equate to on average about 40 cents per delivery.
Does Doordash do mileage reimbursement?
No. Dashers are independent contractors and do not get reimbursement for their car expenses. The only mileage benefit for Dashers is the ability to claim the standard mileage allowance, which is 62.5 cents per mile for the second half of 2022.
Does the government reimburse you for your Doordash miles?
The U. S. Government does not reimburse independent contractors for mileage. The mileage allowance is not a reimbursement and the government doesn't give drivers any money. The way it works is you can claim the 62.5 cents per mile (2nd half of 2022) as a business expense on your Schedule C of your tax return. That mileage reduces your business's taxable income. It is not a reimbursement.
