Dashers are reporting that Doordash is hiding the tip on delivery offers.
I'm not talking about the “your tip may be higher” games they play. You know the ones, where the offer amount is something like $8.50, and you know there's a chance the actual amount might be much higher.
Doordash is doing now goes far beyond that sketchy practice.
All of a sudden, Doordash drivers are getting a delivery offer that highlights the number of estimated minutes for a delivery, and then in small print an offer that says something like “Earn $2.50 in DoorDash pay + 100% of tip.”
In other words, all you see is the base pay. No idea what the tip amount is at all.
What's going on with Doordash? Why are they hiding the tip? Will this be permanent, and if so, how do you decide what offers to take if Doordash is hiding the tip?
In this article we'll discuss:
- How is Doordash hiding the tip?
- Why is Doordash hiding the tip?
- How should we respond?
- Is it wise to use apps that reveal the tip amount?
- Can you successfully cherry pick if Doordash is hiding the tip?
- How can you select orders if the tip is only partly hidden?
- What can we expect in the future?
I know, those look like 7 questions, not seven great strategies. We talk about the strategies in the cherry picking part, but you can also find them all the way at the end.
How is Doordash hiding the tip?
Several Dashers are reporting receiving delivery offers like in the following screenshot:
Instead of a delivery pay offer that you used to see, the screenshot shows the following: “Earn $6.00 in DoorDash Pay + 100% of tip.” In other words, Doordash is only providing the base pay, not a total expected amount as they had in the past.
This compares to the following screenshot. Incidentally, this screenshot was for an offer on the same day as the one above.
On this particular offer, Doordash is not hiding the tip. This is what Doordash drivers have become used to since Doordash updated their pay model in September of 2019. The delivery offer is $5.00, and the language underneath reads: “Includes DoorDash pay and customer tip (Total may be higher).”
So we go from an offer that “includes Doordash pay AND customer tip” to one that only shows the Doordash pay.
It's been known for awhile that Doordash has been partially hiding some customers' tips. However, that was different. Typically if a tip was higher than about $5, only five dollars of that tip would be included in the offer amount. In other words, when the tip was higher it was not uncommon to get a higher tip than was offered.
Under the old system, if there was no tip or if the tip was very low, you pretty much knew that was all you would get. Doordash has been pretty regular with their $3 Doordash Pay, so you knew that a $3 offer probably had no tip, and a $5 offer was only ever going to pay $5.
Doordash seems to be experimenting now with hiding the fact that there is a tip at all with this new layout.
Why is Doordash hiding the tip?
Doordash has a problem.
Deliveries are not getting completed. If the customer doesn't tip, drivers won't take the order.
Dashers understand that a $3 delivery offer means there is no tip. Even many Top Dashers understand that those offers don't adequately cover their time and effort. So the order gets kicked around and rejected.
The phenomenon seems to be getting more and more attention. In an earlier post I responded to an article where someone suggested we deliver the order, no matter the tip. The interesting thing is that the attention seems to be snowballing much like the attention to the tip-stealing accusations related to Doordash's old tipping policy.
Somehow they have to get people to pick up those orders. It's a bad PR thing for Doordash. If they let the news reports about Dashers not accepting orders snowball like this, eventually the word spreads that Doordash is only paying $3 per delivery.
Doordash needs to stop that from happening.
My guess is, this is a test. It's an experiment to see whether switching to this format will increase the acceptance of low or no tip delivery offers.
What other options are there?
We'll start with what option there is NOT.
Doordash cannot require Dashers to accept any offers.
That's the problem with choosing an independent contractor model. You cannot control the work of a contractor.
Somehow they have to figure out a way to either incentivize drivers to take those deliveries, or to trick drivers into it.
This apparently is an attempt to trick us.
Couldn't they just pay more?
They could. I think we'd all agree, they should.
In my experience, Doordash has historically paid lower delivery fees than any of the other carriers. In fact, it's not even close. One of the big factors here is that other platforms tend to bump up the pay as the time and the distance of the delivery increases.
Not Doordash. They claim to pay based on distance, duration and desirability. However, when you see fifteen mile deliveries offered for $3, you know that two of those three are a lie.
I feel like Doordash CEO Tony Xu is kind of set on operating on the cheap. Doordash just isn't going to shell out enough to pay a large enough base pay to make those no tip orders desirable enough for a significant increase in accepted deliveries.
So why not just pay more on the lower tip orders?
That would make sense.
The problem is, they used to do that. And they got a lot of bad press for it.
Under the Doordash's old pay model, Doordash had a $5.50 minimum that they called the guaranteed amount (in most markets). Their official pay model was $1 plus tips, but they said that if the $1 plus tips didn't equal the minimum pay, Doordash would make up the difference.
Follow me here to see how that created a problem. You order food and you don't leave a tip in the app. The Dasher would be paid $5.50. The next time you order food you decide you should tip the driver, right? You leave a $4 tip.
The Dasher gets paid $5.50.
You left a tip thinking the Dasher would get more. They didn't.
Couriers started figuring that out. Some claimed Doordash was stealing customer tips. Technically they weren't but they weren't really in the right, either (in my opinion). Any time they decide $1 for a delivery fee is legitimate, there's a problem.
Dashers felt that Doordash was pocketing that tip money or using large tips as an excuse to pay a lower amount of money. Doordash claimed they were simply subsidizing those deliveries that didn't have sufficient tips.
It was probably a bit of both.
Doordash had to pay a $2.5 million dollar settlement over this issue well after they went to the new model. It wasn't Dashers who sued. It was customers. Customers realized that Doordash workers weren't getting the extra money when they left a tip, so they sued over deceptive practices. I think Doordash realized they couldn't argue their way out of that one.
If they go back to a guaranteed minimum pay model and noticeably supplement low tipping orders, Doordash becomes vulnerable to more such legal action.
That option's off the table.
How would this help Doordash get more orders taken?
I think they're speculating that if Dashers don't know which orders to reject, they won't reject so many orders.
They probably aren't wrong.
The #DeclineNow and #NoTipNoTrip folks aren't going to know when there is and isn't a tip. Either they'll have to figure out another tactic, or they'll just move on.
In late 2018 through 2019 I noticed Grubhub experimenting from time to time on hiding the tip amount. It was always a spot thing, and never lasted long. They had (and continue to have) the same problem.
Back when Doordash announced they would come up with a new pay model, I speculated on what it might look like. I thought back then that I missed by a long shot, but now I'm wondering:
I don't expect them to be incredibly transparent, whatever it is. My guess is they are going to be more like Uber and Postmates, where they will no longer identify the payment amount. They may do something in between where they let you know the base amount but not the tip. I don't think we will know until the trip is over if there is a tip. I think they see Grubhub's struggles and will learn from them.My speculation, in a July 2019 blog post, on what the new Doordash pay model might look like.
They did move over to a model closer to Grubhub's. Nearly two years later, they're having the same problems as Grubhub.
Right now, Doordash is just trying to figure out if hiding the tip will solve the problem.
How should we respond?
My theory is that this is just a test. I think they're doing the same thing I saw Grubhub do a couple years ago.
I could be wrong. This could be the beginning of a rollout of something more permanent.
Either way, you have some decisions to make.
What if it's a test? Is there any way to influence the test? How do you show Doordash that it won't work?
I don't know the answer to that one. Some might choose to sit out. If Doordash wants to pull this, we can just sit on the sideline and less orders are fulfilled. The problem is, Doordash can just add more new Dashers.
Do you buckle down and do everything you can to give good service? A lot of people think that's a way to make sure the tips stay high. It's hard to say if that helps, considering cash tips are rare and customers usually tip through the app when placing their order.
Or do you just wash your hands? Enough already. If Doordash can't be transparent about the pay, it's not worth delivering for them any longer. Maybe it's time to move on to Grubhub or Uber Eats.
Are there ways to pivot? Can you shift your thinking on how to accept or reject offers if you don't know the amount ahead of time?
Here's my thinking on all this: You're running a business. It's easy to be great when it's easy to be great. (Thank you, Captain Obvious). The really good operators are the ones who rise to the top when things get tough. Which one are you?
Is it wise to use apps that reveal the exact tip amount?
There are some hacks out there. Some have used an older version of the Doordash app that would reveal the total amount. I've heard from some that it stopped working, others that can still get it to work.
I do know that when Doordash sends out a delivery offer, the system encodes the full pay information. Some have figured out how to get that data.
The question is, is it a good idea?
Back in December of last year, Doordash required all of their Dashers to agree to a new Independent Contractor Agreement. Most of it was pretty much the same thing as before, but there was one significant section that was brand new. That section went into great detail about how independent contractors could use the data in the app.
I wondered then if there was a specific reason they were adding this information. It's not like adding an end user license agreement – that stuff is standard fare. This was an addition to the independent contractor agreement – a totally different type of agreement from a EULA.
The thing is, why put this in the contractor's agreement? The only answer I can think of is that they want to exert more control over how the app is used. Putting this in there gives them room to take action if the app is used improperly, as defined by Doordash.Part of my commentary on the Doordash ICA changes in December, 2020.
Is what we're seeing happen right now related to why they added all this language? I don't know, are the folks at Doordash smart enough to think that far ahead?
So here's what it boils down to when it comes to using an app that can bypass the tip-hiding part of the Doordash app:
If Doordash is indeed planning to hide the tip at scale, the ability to see the total amount would be a tremendous advantage. There are very few who have access to that technology.
If no one else knows if there's a good tip out there, you will find a lot of deliveries that are well-paying, but no one knows it's a well-paying delivery. Knowing what the final pay will be might open you up to more potential high paying deliveries than before.
Having said that, understand that in using that technology, you are taking a chance. You may be risking deactivation.
I can't help but think Doordash put that new language in the independent contractor agreement for a reason. I don't think there's a coincidence that Section 12 was added to the ICA just a few months ago and now Doordash is experimenting with these changes.
The legal grounds here seem fuzzy. I'm not a lawyer, and I don't know whether or not Doordash can legally stop you from using any tip-revealing apps.
That said, Doordash also knows that you probably aren't going to put up a fight if they deactivate you.
Are you willing to take that chance?
I know of some who don't feel particularly married to Doordash. Losing the ability to evaluate deliveries makes Doordash less attractive. They'd rather take the chance, because they feel like the alternatives to Doordash are much better if Doordash is hiding the tip amount.
Related: Para introduced Tip Transparency, a feature that allows Dashers to know the full payout. Doordash reacted by changing the information they send to your phone when offering deliveries making it impossible to identify hidden tips. Is this the end for Para? We talk about that here.
It's a decision you have to make. I personally wouldn't tell someone to use such an app. That also means I wouldn't pass on where to get such technology if asked. I don't want to be responsible for if something happens.
Only you can determine if the risk is worth the reward.
Can you successfully cherry pick if Doordash is hiding the tip?
Back before Postmates began pulling some shady things about stacking orders, I found that I could do quite well accepting and rejecting orders with Postmates even when I had no idea what the tip OR the base pay was. The same was true of Uber Eats, especially once I could tell where a delivery was going.
Before Uber Eats started adding the expected tip to the offer amount, we only knew the base pay. I adopted what I called a reverse cherry pick approach. If the offer was higher, I was more likely to turn it down (because I knew it would take longer). Ultimately they began offering more information, making that obsolete.
I think there are ways that having the tip amount hidden can give you a competitive advantage. Everyone else who has relied on simplistic ideas like dollar per mile is now at a disadvantage. But if you're able to think and evaluate things on a deeper level, you're more likely to pick up on good deliveries that everyone else is passing on.
Here are some tips I would offer:
1. Time is more important than dollar amount.
I will give Doordash some credit for one thing I saw in the screenshot above.
Personally I find that more valuable than the dollar amount when it comes to accepting and rejecting offers.
The most important measurement of how you are doing, in my opinion, is your profit per hour. How much did you have left over after expenses on a per hour basis?
Even if you get stuck with a no-tip delivery, if you can knock that thing out in fifteen minutes, that low paying delivery doesn't hurt your profit per hour nearly as much as a $10 delivery that took a whole hour.
I shoot for $30 per hour. Say I get a $3 delivery that took me 15 minutes. I still have 45 minutes to make the other $27. However, that $10 delivery that took an hour? The next hour I have to make $50 to get back on track. It's easier to recover from a quick low paying delivery than a very slow moderate paying trip.
2. Give the 50 cent rule a try.
I mentioned earlier, I go for $30 per hour.
That's 50 cents per minute. I evaluate a delivery based on whether I can make 50 cents per minute on it. If I can, I take it, if not, I pass.
I know, that seems odd. How can you use a 50 cent rule (or 40 cents or whatever rule you decide works best for you) if you don't know what you're getting?
I think you can. I've found I could – we'll talk more about that in #4. But even when I don't know what I'll be paid, the 50 cent rule has been huge for me. Here's what it's done for me:
- The 50 cent rule helped me evaluate how much time I'm taking. Everything I do that keeps me from completing a delivery is costing me 50 cents per minute. Time is money – but now I know how much money it is. That's huge.
- It gave me something that helped me gauge how I'm doing. I completed a delivery and ended up with 7 bucks. Okay, how long did it take? Am I ahead of schedule or behind?
- It was a great way to evaluate my decision making. How many times did I meet my goal? How many times did I fail? What could I have done differently?
- I could still use it to decide on delivery offers. The difference is, I'd have to guess at what I'd be paid. I knew that I was virtually assured of being wrong. However, if I was doing it well, everythign would balance out. And if I wasn't, it helped me think about how to adjust my estimates.
3. Pay attention to the restaurant.
Unfortunately, Doordash is taking away one clue that could really help. They removed the number of items.
I found that the combination of item quantity and and restaurant type was huge when deciding on Postmates deliveries.
The bottom line is, a steak house is more likely to have a good tip than a McDonalds order. Sushi places are usually a good bet. The higher the value of food, the greater the likelihood of a good tip.
4. Play the averages.
Get to know your averages.
What's the average tip you receive? What's your average for Chipotle? How about for higher ticket deliveries?
If you know your averages really well, you can reasonably predict what you will earn.
Here's what I mean. You get an offer for $4 base and you know your average tip for that type of restaurant is $4. Okay, evaluate that offer with the assumption you'll get $8. If you would normally take that offer at $8, then take it.
The most important part of this strategy is to know your averages well. If you do this long enough, things do average out. If you're really good at understanding what those averages are, those averages are going to catch up to you.
Let's follow that example further of the $4 offer. You took that offer with the assumption that you'll get $8, but you only got $4. Guess what? The next customer stiffed you as well. You have two deliveries and no tips. Not a great start. However, if you're accurate with your averages, you know that eventually there's going to be some $12 or $16 deliveries. Over time, the averages will catch up to you.
5. Don't be afraid of a $0 Tip.
When you don't know the tip amount ahead of time, it's just going to happen.
Accept it now and it'll make life much much easier.
Life is too short to give some customer the emotional power over you. If you're playing the game right, playing your averages well, you'll get those orders that make up for it.
6. Embrace the challenge.
It's easy to cherry pick when you know exactly what you can get.
The real pros are the ones who can make good decisions without knowing.
Gamify that puppy. Look for the things you can control. How quickly can you get done? How well can you evaluate how long a delivery will take? Someone didn't tip? Were there any red flags you can think of that might have been a warning?
A year ago, I took a shot at going all in on Uber Eats for a bit. At the time, they didn't show the tip up front, and that made me really nervous. The thing is, I had a blast. There was a piece of it where the pressure of evaluating based on the dollar amount was off the table – I was amazed at how that took a load off my shoulders. I could just go out there, make decisions, and not really care.
I made a decision then that I wasn't going to care if I flopped. That seemed to free me up. I had fun and made more money than I was making with Grubhub and Doordash.
7. Keep your options open.
You may find that other food delivery apps might be a better option. Maybe you're more likely to mix in a delivery from Uber Eats or Grubhub.
If you rely much on your gig economy income, you absolutely should have a back up. Things happen. A customer can lie and suddenly you're unable to deliver. No matter what, you need to have options.
The other value of options is, it allows you to measure the impact. Is Doordash the better choice for you right now? But with the tips unavailable, is it harder to earn? Maybe now Uber Eats is suddenly better.
Or, perhaps you're finding more freedom with the new system. Doordash was an afterthought but, since you're the one putting more thought into how you're choosing deliveries, you're doing better than all those lost $1/mile Dashers at finding the good opportunities. All of a sudden Doordash is your go-to.
The more options, the better opportunities you have to adapt.
How can you select orders if the tip is only partly hidden?
We don't know if Doordash is going to make this a permanent thing. However, they seem intent on partially hiding the tip if they do stay.
Apart from using an app or hack to see when they're doing it, what can you do?
I would start by encouraging you to think of some of the strategies above. How can any of those help you make decisions here?
Personally, I tend to evaluate with the assumption that all I'll receive is the amount that's offered. If it's good enough at the amount that's offered, then I'm good if that's all I get.
One of the biggest things you can do is get to know when you're more likely to have what some call a Unicorn (a tip that's higher than expected). Look at number of orders that paid more than you were offered. Was there a pattern?
In my market it seems to happen most at $8.50. Sometimes that drops to $8. Sometimes it's higher, especially when there's peak pay. If the offer is near that magic number, and the food is likely to be a bit more costly, then I'll play the averages and evaluate based on a higher pay. Sometimes I get an extra tip, sometimes I don't. So I'm not going to assume a best case scenario, but I might evaluate based on $11 instead of $8.50. If I'm good at knowing my averages, that kinda thing averages out over time.
What can we expect in the future?
This is a test. This is only a test.
Anyone recognize that? I'm dating myself.
Anyway, the thing is, right now I'm guessing this is all a test. They're taking a sample of drivers, seeing how they do things with this change. Will it lead to more low or no-tip orders being taken in the coming days? Probably. But what's the damage?
There's going to be damage. Maybe it's that they lose good delivery drivers. Perhaps the damage is that someone who tipped really well all of a sudden didn't get their order when they more than likely would have in the past.
That's why they test. Testing gives them more specific details of how things will happen. As I mentioned earlier, Grubhub used to try these tests all the time. They always seemed to bail on that particular test.
The other thing to look at is Uber Eats. It wasn't that long ago that you knew nothing about what you were getting when you took an offer from them. They discovered that it made more sense to provide MORE information. They went from not knowing the pay OR location to providing full pay information, a map with cross streets, estimated time AND distsance.
If it made sense for Uber Eats to make such a major pivot, I'm thinking that this whole thing is going to be a short term deal.
The only thing is, this is Doordash. So who knows?
Just keep an eye on things. Figure out how to adapt if they do make a change. And if this is a permanent change, hang on, this is probably just the beginning of some big changes in the delivery world.