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Meet the New Doordash Pay Model. Same as the Old Doordash Pay Model

Quick Reference: Tax and PPP help.

I read through the email announcing the new Doordash pay model, and I have to say, I'm not sure it's going to be much of a change.

Doordash announced a new pay structure on August 22, saying they would roll it out ‘next month' (September). Of course, September is here, and it shouldn't surprise anyone who watches how Doordash operates. The new Doordash pay model hasn't started yet. Don't expect it to start for awhile. They could roll it out on September 30 at 11:59 PM on the latest possible time zone and say they rolled it out in September.

Nothing's changing here folks. Some orders will pay slightly better. Some orders will pay slightly less. The main structure is going to be the same, they will still subsidize orders. It just won't be as obvious.

Meet the New Pay Model. Same as the Old Pay Model. We will get fooled again.
Meet the New Pay Model. Same as the Old Pay Model. We will get fooled again.

What is the new pay model?

According to their email, they said it would entail base pay plus promotions plus tips. Really, the only thing that's different from the existing pay model is the lack of ‘additional pay' to meet the guarantee. Everything else is the same.

Doordash does state that time, distance, and desirability would factor into the base pay. They just don't say how. And let's be real here folks, they tell us that their current guarantee pay is based on a lot of factors including distance and time, but does anyone know how those figure in?

What do I expect to see?

In almost all cases, I expect to see the base pay will be $2. That's now the minimum according to their email. That's a whole dollar increase on high tipping orders.

I expect to see the same lack of transparency in how they figure out the base pay. You won't see a break down of time and distance. You won't see how much of that base pay is ‘desirability.' You'll just see a base pay.

I expect to see the pay model be very much the same, they just won't be as obvious about it.

The key in this whole discussion? “Desirability.” Doordash intends to include the desirability of an order into how they factor in the base pay.

That means that the tip amount will continue to affect the base pay.

That means base pay will be lower when the tip is good. The base pay will be higher when the tip is not so good.

It just won't be so obvious. Now that they get rid of the ‘guarantee pay' element, they can just make the change in what they call ‘base pay.' But without the transparency, you won't know how much of that base pay is desirability.

When it all comes out, I could be proven wrong. I'm okay with that. But when it's all said and done, they're going to do the same thing. They'll pay more when an order isn't as desirable. You will continue to make the same on most orders whether or not the customer tips. The only thing is, now you won't know it.

There will be differences. They won't be as big as you think.

The biggest difference you're going to see is that a higher tip order will pay a dollar more. They'll take it away somewhere else, you can guarantee.

The other difference is a change in how customers tip. Customers will be allowed to tip after the fact. Personally, I do see this as a positive, but I don't expect that to happen too often. It just works against the psychology of tipping.

Will we really average more pay?

Tony did promise that in his email. “You will earn more money on average – both from Doordash and overall.”

Uh huh.

And remember that he also promised the pay model would roll out ‘next month,' and all indications are that it will be the end of the month.

Tony's a master of parsing words. You should know that by now. You should see it in how they worded things to justify their policies. And you should expect it here as well.

Okay, yes, he promised more money on average. All he has to do is bump up the average by a penny. You seriously think he wouldn't do it that way? Why would he do it that way on everything else and not on the new pay model?

Nothing's changing here folks. Some orders will pay slightly better. Some orders will pay slightly less. The main structure is going to be the same, they will still subsidize orders. It just won't be as obvious.

Why don't I expect anything to substantially change?

I don't think it's about Doordash being shady. I mean, I think Tony and his spin machine are shady, I think the whole independent contractor model is shady, so maybe I do think they're shady. But the reason for the model isn't shady.

It's about getting orders delivered. In particular, getting couriers to accept orders under a typical pay model (such as mileage plus distance plus tips) makes it hard to get orders accepted when the tip is low or non existent. That's just the reality of it all. Ask Grubhub how they are doing in that scenario. They cannot require drivers to accept a percentage of orders. So they have to figure something else out.

Doordash figured out that by paying a bit more on deliveries that had lower tips, they can get more orders accepted. Grubhub has played with doing the same thing – take a look at the bonuses they add on sometimes to lower pay orders. It's just that the way the Doordash model is structured right now is more obvious. They're not stealing tips but subsidizing low tip orders makes it look that way.

They'll need to continue to subsidize low tip offers. It's just that because of the controversy, they have to figure out how to do it without people realizing it. In the end, it's not going to be all that different. They'll just rearrange how they display it. That's all.

I could be wrong. But I think deep down you probably know that it's pretty likely to be the same thing.

Could this help someone else? Please share it.

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Sunday 22nd of September 2019

What I have noticed, is that the pay is considerably less in areas where the demographic is poor. These are typically the people who dony tip. I just received an order for $2!? Before the new pay model rollout, that would have been at least $6. So, it looks like if they don't rectify this immediately, 1 of 2 things will happen. (1) Non tipping cusyomets will suffer, but probably not in silence since they were used to not paying. They will wonder why their ordera are not arriving or coming late or (2). Noone will dash in those areas at all. Both will hurt Doordash's reputation.

Monday 23rd of September 2019

Do you deliver Grubhub also? Just asking because that IS a big problem for them. Not sure how much it's based on area, but that's one reason that Grubhub lost their lead to Doordash is that they have a harder time getting those low tip orders delivered. The way Doordash is doing it now - telling drivers the full amount now (instead of guaranteed) and not subsidizing tips is very much like Grubhub. But the one thing I'm seeing so far is that Doordash has been smarter about it. I've seen definite signs that they are cranking up the base pay when orders are being rejected. I've seen orders offered at $2, and three minutes later the same order (same dropoff spot on the map and same number of items) is now $5. That's part of what they called "desirability" when describing the model. So my opinion anyway, for what it's worth, it's best to reject those orders so that they are making them more reasonable for drivers to accept.

Now the one thing that I notice is that I seem to see better tips in lower income areas and fewer tips in wealthier areas. In those lower income areas you have people who can't afford to tip as much but they also understand the economics better. That's just my experience.

Paid to Drive!

Friday 13th of September 2019

Well said as always!

Saturday 14th of September 2019

Thank you.

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