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Are the New Doordash “Improvements” Real or Just Smoke and Mirrors to Distract us From the Tip Stealing Talk?”

Doordash sent an email out to their Dashers yesterday with information about new improvements they are providing for their platform.

If you have received any of the emails in the past from Grubhub and Postmates about how they were “improving” your pay (which translated, meant improvements for them, not us), it's pretty natural to ask, “Just what are they taking away from us?”

Now the good news with Doordash is that when they only pay a dollar for your deliveries, they can't really take away much.

Is Doordash really improving anything? Or is it smoke and mirrors to get us to not think about the elephant in the room, which is their abysmal $1 per delivery pay model?

So, About that Elephant in the Room….

Obviously, with all the uproar in the past over the Doordash pay model and the accusations of stealing tips, everyone is wondering, are they going to improve that model?

Picture of an elephant in a room, in reference to the Doordash Pay Model
Doordash briefly addresses the elephant in the room, the pay model, but quickly tries to distract us from it

The quick and hard answer: No.

Hell no.

Now to his credit, Tony Xu does at least acknowledge the elephant. Sort of. More or less he approaches it the way he always has by pretty much trying to get us to think it really isn't there.

With the current pay model, you don’t have to gamble hoping for an order with a big tip. Dashers will continue to see a guaranteed minimum (including tips) on their screen for each delivery, and you will never earn less than the guaranteed minimum if you complete the delivery, even if the customer provides little or no tip. These features of our pay model will remain intact.

Tony Xu, in an email to Dashers

The pay model is addressed immediately, which is good. But it's never addressed. Just the same old talking points, the same old stuff and spin. But you notice they never address the fact that they are only paying a dollar. It doesn't matter how far you go, how long you wait, whether you are placing the order. You get a dollar plus the tip. A whole freaking dollar. It's only if the customer doesn't tip enough that they kick in some extra.

Ultimately, Doordash is doubling down. Damn the torpedos, These features of our pay model will remain intact. So will the $1. So will relying on customer tips to avoid paying out the dashers who are busting their rears to get food to customers so we can make money.

That said, I'm sure no one is surprised that the elephant was never really addressed, are they?

Update: Doordash continues to use deceptive language in their promises. On May 6, 2021, Doordash promised a new perk for their Top Dasher program. In reality it was only a re-wording of an existing benefit.

Throwing a Blanket on the Elephant

Maybe the most interesting thing about the email is the graph that they use to say they are addressing the top concerns for drivers. Displaying the graph is their way of saying “people aren't concerned about the pay model. See? It's not on the list.”

Hmmmm…. where's the pay structure on this list? Not there? Must not be an issue.

Ummmm…. guys? You never listed it as an option in the survey to begin with. If you know enough to know to include “Make the app have fewer crashes/bugs” you know that the pay structure should be an option. It's just a blanket to throw over the elephant.

But there are some improvements

The one thing I can say that's good about the email from Doordash, despite how I feel about whitewashing the pay structure issue, is that they did announce some improvements without appearing to have taken anything away. Some of the improvements are small, some could be substantial. I'll do a quick rundown of my take on the improvements.

Earnings breakdown.

“The #1 thing you told us you want is to see the breakdown in your earnings between what DoorDash pays and what a customer tips.” I can guarantee that the #1 thing people said was related to the pay model, overwhelmingly, but like I said, that wasn't an option on dropdown in their survey.

Doordash is, to their credit, starting to show a breakdown of how much of the pay was the tip and how much was their $1 fee, and how much was the “additional pay.” I think there was so much pressure that they had to do that, to demonstrate that they aren't stealing tips.

And no, Doordash isn't stealing tips. That doesn't hide the fact that on the majority of deliveries, the tip doesn't increase the earnings of the driver. Which, the end result is that it's not that much different than if they were stealing tips, is it? Okay, I'm done with that topic for now… on to the improvements.

It was possible in the past to see how much was actually from tips, but it was cumbersome. You had to look at the total breakdown for the day, and then compare it to the total daily breakdown after each delivery. So now, at least you can see what part of the delivery was tip money.

But it doesn't really say that transparency has improved. Doordash still gives us no idea at all how they calculate their minimum guarantee. If they start giving us that information, then I can give them a little credit.

Better earnings for longer-distance deliveries.

This can be an improvement, but it's very limited improvement. The distance of some trip offers that only provide the minimum guarantee can be astounding. How many times do you think: “HOW do they figure that THIS should pay only $5.50 as a minimum? ”

The problem with this? If the tip is good, you don't get any extra pay for the distance. Because if the tip plus $1 is greater than their calculated minimum, all you get is $1 for your delivery fee. It doesn't matter if it was 1 mile or 20 miles.

Personally, I'm not likely to see this benefit me, due to how I evaluate orders. Longer orders with Doordash, even if they do improve their calculations for distance, do not pay enough per minute to meet my 40 cent per minute standard. And usually not a 30 cent or 20 cent standard. The only time it can be worth while is if the tip is fantastic (which takes us back to the previous paragraph).

More deliveries closer to where you are.

THIS one could be huge. Most orders I accept from Doordash have a total distance of 3 miles or less. Anything longer than that usually isn't going to pay out very well. Short quick deliveries though are very profitable, even if it's only a $5.50 or so payout. A $5 delivery that takes 10 minutes total is a $30/hour rate. I'll take that all day.

My observations are that the current dispatching is pretty random. The distance from the restaurant to you doesn't seem to enter into the equation, you seem just as likely to get an order on the opposite side of your region as you are to get one close by. Now the good news is, if you reject a far away order, a new order can come in immediately – this is a definite advantage over Grubhub. An improvement in this part of their calculations can help both drivers and themselves by reducing rejection rates.

Better incentives.

We know Dashers care a lot about incentives, and we hear that it’s difficult to learn about upcoming peak pay, understand the requirements to achieve it, and to track progress. We’re focusing on two ways to address these issues. First, we’re rolling out a new “Promos” entry point on the Dasher app home screen that makes it easier for you to find upcoming peak pay and better plan your schedule. Second, we’re testing ways to make peak pay incentives easier to achieve and making the eligibility requirements more clear. These new updates will increase ways to earn on the platform. We’ll keep you in the loop as we make progress.

Do you notice what is NOT in this paragraph? An actual increase in incentives. It's about making it easier to see what incentives are out there, and making it easier to see the requirements for an incentive. If they are easing the requirements, such as eliminating the acceptance rate requirements for incentives, I can see this being an improvement for drivers WHEN the incentives are available. The incentives, when they are available, do become a game changer, and so I would have been more encouraged if they did actually offer more incentives.

Less wait time.

Nobody likes to wait at the restaurant, and our goal is to enable you to arrive just as the food is ready so you can earn more money in less time. We have numerous teams working to address this issue. We’re focused on improving the timing of when Dashers are offered deliveries to help avoid early arrivals, better predicting food prep times, and working with merchants to reduce late orders. 

If they do make some improvements here, this also can be a game changer.

At the end of February, Postmates sent out one of their “improving your pay” emails. The first takeaway was that it was a reduction in fees. However, they introduced their email talking about “investing in more ways to reduce your time waiting and boost your time earnings.” To their credit, my experience has been that they have dramatically improved in those areas. Postmates orders (at least the ones you don't have to order) are far and away the most efficient ones I take. So while the delivery fee is lower, I'm finding that my pay per minute has gone much higher.

If Doordash truly does make an improvement here, that can make them an even more attractive option for drivers. Wait times for Doordash and Grubhub tend to be very frustrating (Cheescake Factory anyone?) and can make even a $20 delivery into something with a terrible pay rate.

If they use drive time TO the restaurant as a way of timing it so you have no wait, that isn't a real improvement. It's the same amount of time from the moment you get an order to the moment you leave a restaurant in either situation – you just have your vehicle costs if you have a longer drive. But if they are better at timing the sending of orders with the availability for pickup, this can be a huge deal. Efficiency is often worth more than just the bottom line of an order.

Ongoing Dialogue.

Blah blah blah. That's pretty much what this one is. Go back to that chart above. Show me where the concerns about the pay model are on that chart, and then tell me whether that dialogue really means anything. Grubhub listened to us and decided we wanted our delivery fees reduced. Do something about that $1 delivery fee and I'll believe you actually are listening to us.

Injury Protection for Dashers.

This is good. Right now, Caviar is the only one that I know of that provides anything like this. As independent contractors, we have no workers comp, your health insurance may not want to cover work related injuries (even if you are self employed) so this can provide some coverage in a gap.

Here's some things you need to know though about insurance and Doordash:

  • Your personal car insurance will not cover you at any time you are LOGGED IN on the app. Not just on an active delivery, but logged in.
  • Doordash offers NO car insurance for you at all while on a delivery
  • Doordash does provide liability insurance if you are the cause of an accident (and that only insures the other person) – but ONLY while you have food in the car. If just logged in or on the way to the restaurant and you are at fault in an accident you may be paying out of pocket. Say goodbye to your house.
  • While this insurance is good – it is only while on a delivery. They do not define what “on a delivery” means. If you're just logged in, you're not covered. Is “on a delivery” the same as their “while you have food in your car” in their liability coverage? Does that mean if you get hurt on your way into the restaurant to pick food up, you're not covered?

Overall, is this better for us?

The bottom line is, any time they can improve things, that's an improvement.

It's easy to dwell on the pay model. Personally, I think this is more of a smokescreen to get our attention OFF the pay model. But even if that's true, there are good things to take away from this.

Some of it is fluff. But in my opinion, there are a couple that are huge, if they actually follow through – shorter dispatches and less wait time. Time is money – my 40 cent rule says it's worth 40 cents a minute. Saving 5 minutes is the same as adding $2 to the delivery fee. THAT alone can make all the difference when choosing between a Doordash delivery and someone else.

In a nutshell, my experience has been to take any promises of improvement with a grain of salt. Look for what it actually does for your bottom line and your efficiency. Some of these are smoke and mirrors and a lot of talk. Some have the promise of being actual bottom line improving benefits. Keep your eyes out on how Doordash actually implements these “improvements.” And never forget to look for the hidden things they might take away in return… but that's just me being a cynic.

The Email (you can read and judge for yourself)

How do you think these changes can improve your bottom line?

Could this help someone else? Please share it.

About the Author

Ron Walter made the move from business manager at a non-profit to full time gig economy delivery in 2018 to take advantage of the flexibility of self-employment. He applied his thirty years experience managing and owning small businesses to treat his independent contractor role as the business it is.

Realizing his experience could help other drivers, he founded to encourage delivery drivers to be the boss of their own gig economy business.

Ron has been quoted in several national outlets including Business Insider, the New York Times, CNN and Market Watch.