Is it true, do Doordash Dashers really make only $1.45 per hour on average?
You've probably seen the headlines out there that say it is true. The headlines don't tell the whole story.
Yes, there was a study. But the study doesn't say Dashers are only getting $1.45 per hour from their work. It concludes that what they are paid by Doordash comes to that much after you deduct expenses and extra taxes.
It is based on earnings MINUS TIPS. That's kind of an important detail that the headlines leave out.
I received a well thought out to this article and realized I may have left the impression I thought the study itself was misleading. I want to make clear here before you read any further. Working Washington, who did the study, was very up front about what the study said. I hope I do well in the article in expressing my respect for where they are coming from and why they did it the way they did. My beef and the reason for writing this article is with some of the coverage of the study that do not present these facts. They use headlines that distort the actual earnings and never disclose that the report eliminated tips from the study. There's a legitimate reason for Working Washington to analyze the data in the way they did, but there's not a legitimate reason for these outlets to report it in the way they did.
It's all about how you present the numbers.
I'm going to use their calculations on what I made. Last year, I received $5,319.65 for deliveries on Doordash. Of that, $2,528 was paid by Doordash, the rest was in tips. It took me 13,132 minutes (218.9 hours) to do that and I drove 2,182.4 miles for those deliveries. If you use the calculations from their study that would be $1,265.78 in expenses at 58 cents a mile, so I've only got $1,262.22 of my Doordash pay (not including tips) left. They calculate the extra 7.65% we pay in self employment tax, so $96.56 off that, leaving me now at $1,165.66. That comes out to $5.32 per hour that I got from Doordash.
If you look at it in that light, $5.32 is kind of depressing. It's a heck of a lot better than the $1.45 they came up with. But here's the thing: My car doesn't cost me 58 cents a minute. I've run all the numbers including depreciation and all that stuff, and it's 25 cents a minute. My actual cost for those deliveries is $545.60. The extra tax is actually $310.12 (because they left out the part that tips are taxable), so you take those off the money that came in, I'm left still with $4,463. Which is $20.39 per hour. THAT'S WHAT IS LEFT OVER.
Which is better?
$5.32 per hour
or $20.39 per hour.
or how about $24.06 per hour (that's the gross I made on Doordash deliveries)?
They're all the same thing, the only difference is what I chose to present. And that is how you can manipulate numbers to say the things you want to say.
So How Much Do Doordash Drivers REALLY Make?
Or anyone else for that matter?
There's no good answer.
I would suggest there are some that are making well under that $1.45, and that's even after including tips. Is that because they suck at their business? Is it because the market is horrible where they are? Or is it because Doordash (or anyone else) is screwing them over?
There are so many variables that it's impossible to say.
I know there are some who do even better than I do.
I will also tell you that if I did Doordash exclusively, I wouldn't be making that much. If I accepted 70% of my orders, it wouldn't be anywhere close to what I earn. Suppose I decide to work only from 2 to 5 p.m. on weekdays and accept everything? It's going to be horrible.
But why would someone put out a report that is off that much?
I don't know that the report is off. It's more like what they report on is different than what it looks like.
Okay, I will say the report IS actually off because of how they gathered their information. There were some issues in just having people send in information on individual deliveries, told drivers it was okay to estimate minutes and miles. That left it wide open for bias. Did they submit only low pay deliveries to show how bad it is, or did they skew to higher ones so they looked good? I don't trust the accuracy. I just don't know if it's actually higher or lower.
This was a study that was done with an agenda. It was put together by a group that is lobbying to protect workers in the gig economy. Their belief is that the best way to protect workers is make them employees.
The study does show an inequity for employees who are tipped
Their reason for not including tips in the study wasn't about skewing the numbers. The idea was to compare gig work to employment work.
Here's the deal with employment. You get minimum wage. Employers are required to fully reimburse you for your expenses. That's what this study is trying to show: How much is this particular company (Doordash) actually paying the workers? This is meant to be a comparison to tipped employees.
In Washington State, you are entitled to $12 per hour PLUS your tips PLUS reimbursement. Based on the way they structured it, the average they came up with is $10 per hour less than what a driver would have received for the same efforts in Washington.
The $5.32 I came up with? That's $4.66 per hour less than the tipped minimum wage in Colorado. So yes, you could say that as far as what I am receiving from Doordash, that's less than minimum wage. I think there's a legitimate case involved there.
But does that mean I would actually make more as an employee?
Ahhhhh….. there's the question. I see what they are getting at, but there are a couple of issues involved.
For one thing, forcing them to hire employees is not the same thing as saying I would make more. There are a lot of issues to consider:
- There is no guarantee that I would be hired as an employee. Requiring companies to hire employees, like AB5 is attempting to do, is not the same thing as converting contractors to employees. It would involve a separate hiring process.
- My possibility of working full time diminishes dramatically. Deliv converted to using employees in California, and very few of those employees are full time.
- There is no guarantee the company would even remain in business in the state. If the business model doesn't work using employees, they may choose to shut down rather than operate at a loss.
- I could actually earn less in tips. That's because as an employee, I no longer control the process. The employer does. Look, all of these companies are horribly inefficient in their dispatching. When I have no control over what deliveries I am on, I have a higher chance of long distance, low-tipping deliveries. That can lead to overall overall pay, and to tips being a much smaller percentage of my compensation.
Comparing your earnings as a self employed person to that of an employee is an apples to pencils comparison.
It's a worthwhile conversation to have. I do believe that it's valuable and even important to look at where you are in your earnings. If you are on the fence about whether to be independent or to find a job, it's important to know where you are.
It is also important to realize exactly what you are making. Too many of us ignore the expense side of the equation altogether. We see the $150 we got from Grubhub or Doordash for the day as the same as earning $150 on a paycheck. Information like in this study helps put things into perspective.
But that said, I call it an apples to pencils comparison. Apples and oranges are both fruit which is why I chose something different in pencils.
We are not employees.
Whether or not these companies SHOULD hire people as employees is a legitimate issue and should be discussed. That's why the idea behind the study (you can read more of it here) has merit. It should be discussed.
But that doesn't change the fact that we are not employees.
I'm going to get real blunt here: If you didn't pay attention to the fact that you are an independent contractor, I'm not going to feel too sorry for you if you arnen't getting what you think an employee should get.
If you didn't do the research into what an independent contractor is, that's on you, not on Grubhub, Doordash, Uber or anyone else. You are running a business. If you don't like that or don't agree to that idea, well, guess what? You signed the contract. You agreed to the fact that you are running a business.
So if you aren't treating this like a business, that's your fault, my friend. You can't blame anyone else.
What do you do if your earnings ARE closer to $1.45 per hour?
Remember this: You're a business.
What does a business do if they are't making it? They get better or shut down.
What are you doing that might keep your profits down? How are you limiting yourself? Where's the inefficiency.
What can you do to improve? Do it.
What if there's nothing you can do?
Then why are you still in business?
You aren't entitled to anything as a business owner. If you decide to open a pager store, should anyone then bail you out because you picked an obsolete industry? Why should Doordash bail you out if you are inefficient or because you're in a market that doesn't support doing this as a business?
If more people thought of this as a business and were smart about shutting down a business when the market doesn't support it, companies like Doordash wouldn't get enough people to deliver their food. They'd either have to pay more or hire employees. Or maybe shut down. That's business.
But no one is forcing you to deliver for Doordash. Or Grubhub or anyone else. If it's not profitable, move on to something that is.