Does Doordash pay for gas for Dashers? Unfortunately, as independent contractors, we are on our own when it comes to paying for gas and operating our own vehicle.
That doesn't seem fair when gas prices are out of control, does it? Shouldn't Doordash do something? How can we afford to keep our cars on the road if Doordash doesn't pay for gas?
Let's look at this a bit deeper. We'll ask three questions:
- Does Doordash pay for gas?
- Will Doordash pay for gas if prices keep going out of control?
- Should Doordash pay for gas?
Then we'll wrap up with some strategies you can use to keep your gas costs low when the Doordash food delivery service doesn't pay for gas.
Does Doordash pay for gas?
Moving on, next point.
Okay, there's a little more to it than that.
That may not be as obvious to new drivers, so if you are a new Dasher, I apologize. Doordash doesn't pay any extra money for gas. You get paid on a per delivery basis, with a payment that includes Doordash base pay, any incentives like peak pay and the customer's tip.
It's up to you to take care of your gas costs out of that money.
We'll take a quick look at Doordash pay, how it Doordash says they pay (and how they really pay), and then look at one sort of exception.
Understanding how Dasher pay works.
The important thing to understand here is that Dashers are independent contractors. That means that we agreed to do the work for Doordash as businesses, not as employees.
And here's the thing about that: Doordash actually cannot reimburse you for your gas or car expenses.
A company cannot control the work of an independent contractor. The IRS expands on that by explaining three types of control. One of those areas of control is Financial.
Are the business aspects of the worker's job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)Internal Revenue Service definition of Financial control of the worker.
What that means is, all they can do is pay you for the task you are performing. That leaves you completely on your own for your own business expenses, including gas and other costs of using your car.
The Doordash pay model and distance you are driving.
Doordash suggests that their base pay factors into how far you are going for a Doordash order.
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
Doordash lies about that.
You cannot tell me that distance and duration factored into this delivery offer that showed up on my Dasher app. I've seen far more outrageous examples from others than the one above.
Doordash clearly lies about whether distance has anything to do with what they are paying.
In the end, it really doesn't matter to me. I make my decisions whether to accept or reject a delivery. I look at the total that's going into my bank account, and then determine whether accepting a delivery offer makes sense for the amount of time and the distance I'll have to drive. Door dash can use whatever they want to use to calculate their pay, and I simply accept or reject.
Is Doordash testing a new model that pays better for extra driving?
Doordash has been rolling out something a little different in some markets. They word it in a way that says they want to help Doordash delivery drivers with longer distance food orders.
The main thing to remember is, Doordash lies about this kind of thing. A lot. You also have to pay attention to what they are saying.
Dashers in several markets began receiving notifications like the one above, promising more pay for longer deliveries.
Remember how I said Doordash lied earlier? They confirmed it with this notification.
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 delvieries 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?”
It was an admission of a lie.
Lie or not, does this change mean that Doordash has seen the error of their ways? Here's two things to pay attention to:
- Doordash has been practicing a $3 minimum. Now they say the pay can be as low as $2.50. In other words they're paying less on several orders in order to supposedly pay more on others.
- Doordash only promises 10-30% improvement if you go a long way. That's 30¢ to 90¢. Ninety cents at the most for extra miles? (Or is that 25-75 cents – I wouldn't put it past Doordash to use the $2.50 as the new baseline – and if that's the case, now the most you'll see is $3.25.
- I've already seen ten mile plus delivery offers that only had $2.50 as the guaranteed amount. Tell me how that's supposedly paying more.
This isn't an improvement for drivers. All it is is Doordash taking a cut on one end, and spinning it to look like an improvement.
Things are a little different for Dashers in California
Drivers in California have things a little differently.
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.
There, drivers have a minimum pay that is based on 120% of minimum wage for active time on the app plus 30 cents per mile driven on a delivery.
This is not a reimbursement plan. It is a basis for figuring minimum pay. However, it does ensure drivers receive a bit more pay for longer distance deliveries.
Drivers in California won't see any increase in pay per mile for 2021. The mileage allowance for 2022 would be adjusted based on inflation. Lately I'm seeing a 5% inflation rate for the year. If that holds, it would increase the per-mile pay for Prop 22 by a penny and a half.
Don't spend it all in one place.
Will Doordash pay more to cover increasing gas prices if gas continues to go up?
I don't know if you remember the summer of 2008. The average gas prices in the United States shot over $4 per gallon. I remember a lot of service industry companies adding a surcharge to help cover the added costs.
Would Doordash do something like that if things go out of control?
Don't plan on it.
I expect one of two scenarios:
Doordash won't do anything. Part of that is their hands are tied by the IRS definitions we looked at above. If they provide a reimbursement, they risk being having us classified as employees.
If Doordash does provide extra pay in one place they'll take it away somewhere else. We talked about Prop 22 above – when that went into effect, Doordash and other gig companies started putting a surcharge on delivery fees to cover those costs. However, they also reduced the suggested customer tips. That way the final total didn't look like the cost of ordering had increased.
I don't have a problem with Doordash adding a surcharge to cover better delivery fees in light of the increased costs. It's certainly a good excuse for them to add a little to the cost.
However, Doordash's M.O. is to take that money away from us somewhere else.
So, with all that said, I don't expect Doordash to improve a thing.
Should Doordash pay for your gas?
If you were an employee, they should be paying for your gas.
You're not an employee. If you want employee perks, go get hired as an employee. There's an incredible number of opportunities out there.
The alternative is you can take seriously the fact that you are running a business and you can take responsibility for yourself to take care of your own expenses.
As long as you agree to be an independent contractor, Doordash has no obligation to pay you extra. The good news is, you have no obligation to take whatever they offer you. You get to choose.
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.
However, we can let the market decide. We can play their game with them, and make our decisions accordingly.
It's very simple: If the offer on the Doordash app doesn't pay enough to cover the cost of driving, reject the delivery. It's only when Doordash understands that they can't get drivers to take offers that they'll increase pay.
Doesn't the increase in gas prices change things?
Here's the thing: It's not as bad as everyone's making it out to be.
As of the end of June 2021, gas prices averaged $3.16 per gallon. That's compared to $1.94 in April of last year.
But it's also compared to $2.95 in May, 2019. Or $3.77 in June 2014 or $4.11 in July 2008. That extreme low price of 2020 was an anomaly, not the norm. No one was asking Doordash to reduce prices because gas was so cheap last year.
Two years ago, gas prices were only 20¢ less than what they are right now. Ten cents a year is not a massive price increase. It only seems massive because the low prices last year were such an anomaly.
But here's where the hysteria sets in: I'm hearing people talk about the higher gas prices might mean that we'll be better off claiming actual expenses on our taxes instead of the standard mileage deduction.
Do the math here
A $1 per gallon increase in gas prices for a car getting 30 miles per gallon increases your cost per mile by all of:
Three cents won't make the actual expense method better.
Obviously, if gas costs more, it costs us more to deliver. What I'm telling you is that it's not as dramatic as we're making it out to be.
Is Dashing still worth it? What can we do about these gas prices?
Here's the thing: If 3¢ per mile extra cost means it's no longer worth delivering, the truth is it probably wasn't worth it to begin with and you just didn't realize it.
If you have a newer car, that car is losing 5 to 10 cents value with every mile you drive. Funny how we don't care about that but freak out about 3 cents of gas.
That's not to downplay the cost of gas. For the 2400 deliveries that I completed last year, a dollar per mile would add about $400 to my cost of operating. I'd obviously much rather have that $400.
But at that number of deliveries, $400 in extra cost is not a deal breaker to me. $35 per month is not enough to make me say it's not worth delivering any longer. And if this is only a side hustle for you, that cost impact is even lower.
And in fact, if a lot of drivers are quitting because of gas prices, that allows me to be even more selective on my deliveries, and end up with greater earnings.
In the meantime, if you're looking for an easy way to adapt to gas prices, here are five quick suggestions:
- Keep things in perspective. The sky isn't falling.
- Drive less. Don't take so many offers where the local restaurants are so far away. Consider bike deliveries where possible.
- Increase your price. You have the right to accept or reject.
- Try out gas saving apps like GetUpside or Gasbuddy, or start using fuel rewards from some stations.
- Check into a credit card or debit card that might have a cash back feature.
You can get continue reading to get more detail on these tips and read more about how to adapt to high gas prices here.
Frequently asked questions about Doordash and fuel expenses.
Doordash does not pay any extra money to dashers to cover gas costs. Because we are technically contracted as a business, it is our responsibility to cover our own expenses out of the money we receive.
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.
No. Doordash has notified drivers in several markets that they are changing how Dashers get paid, however none of the details in that notification include an actual change of the pay model. The model remains that Doordash pays $2 to $10 in base pay depending on distance, duration and desirability. The only thing that is changing is that Doordash is practicing a lower pay minimum ($2.50) and they promise 10-30% higher on long deliveries (30 to 90 cents based on the practiced $3 minimum). The model itself is not changing and Doordash isn't offering much more for longer deliveries.
No. The red card is only to be used to pay for customer meals on specific deliveries. Using the red card for personal use is a great way to have your Dasher account deactivated.
Doordash recently introduced their DasherDirect debit card. Your payments for deliveries can be transferred directly to the DasherDirect card. One feature on the card is 2%. This is similar to the GoBank card offered by Uber Eats that also had a cash back feature.
In December of 2020 Doordash was said to work with GetUpside. However, I do not see any such relationship right now on their partners page.