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Is Doordash Stealing My Tips? Increase Earnings by Understanding the Doordash Pay Model.

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No.

No, Doordash isn't stealing your tips.

At least not technically. But you can't blame drivers for getting that impression.

Editor's Note: This article was written during Doordash's previous pay model so some things will seem different. Some things haven't changed – I'll talk about what's changed at the end of the article.

No, Doordash isn't Stealing Your Tips.

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?

Neither.

Both.

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). When the guaranteed amount is $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. Even though I already knew the answer I 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 through the app actually got $5.95.

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 that 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?

An old fashioned villain with top hat and moustache preparing to tie a woman to the railroad tracks.

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 doesn'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
  • Understand when taking a delivery that the minimum amount they offer you may well be all you will get, and choose accordingly.
  • 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.

Update: Doordash has changed their pay model since this was written. Some things haven't changed.

In September, 2019, Doordash updated their pay model. They moved away from the confusing two tier pay system and went to a straight base pay plus the tip.

There's a lot that hasn't changed since Doordash went to the new pay model.

The base pay did change a little. It went from $1 to $2. To be fair, in practice it's been closer to $3 in most cases. When all is said and done though, Doordash's portion of pay still seems to be lower than any other platform.

And there are a lot of guessing games. Doordash still likes to disguise offers that have a larger tip. So you still need to pay attention to a lot of factors to determine if you might get more.

The tips above seem to still apply. Best practice is to assume that the offer amount is all you will get. Don't take orders on hope. If it's good enough to take as it is, take it. It's better to be pleasantly surprised later.

Final Thoughts:

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 people who will try to tell you how to accept or reject orders based on how Doordash pays. I'm glad to offer the ideas that have worked for me, but in the end, it's up to you.

If you choose to take smaller offers, that's your business decision. If you choose to cherry pick the life out of your offers, that too is your decision.

The bottom line is, Doordash cannot control you, no matter what their pay model.

Unless, of course, you let them.

Could this help someone else? Please share it.

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