Is Doordash a Good Delivery Option for Independent Contractors?

As part of the Deliver on Your Business Podcast, we are looking at the four leading delivery companies and examining some of the pros and cons of working with each. This week, it's finally time to take a look at Doordash. I planned to do this earlier, but decided to wait for the new pay model to roll out. Now that it's been out a couple weeks for me, let's dive into what it's like to deliver for Doordash.

Doordash ascended to the throne earlier this year as the new king of the mountain in food delivery in the US. Grubhub had long been dominant as the market leader, but has struggled recently at keeping their customers and restaurants. It will be interesting to see if the new structure will impact that market lead.

Is Doordash a good delivery option? We'll look at different aspects of delivering for Doordash, and I'll ad my own thoughts, observations and experiences. There is no one definitive answer to that question for everyone. It often depends on your own style of doing business and on how busy Doordash is in your market.

Looking at Grubhub, Uber Eats, Doordash and Postmates

Some recent episodes in our Podcast and associated blog posts have looked at the major food delivery platforms. The goal has been to ask the same five questions of each of the dominant companies. Episode 33 looked at Postmates, and Episode 35 looked at Grubhub. We will also get a look at Uber Eats, although they too are in the midst of rolling out a new pay structure, so I may wait for that to take hold like I did with Doordash. This week, we'll focus on the same questions and how they relate to Doordash:

• How well do they pay?
• How does their app work?
• What are their deliveries like?
• Do they respect the Independent Contractor Relationship?
• What is their support like?

How is the Pay for Doordash?

Doordash has been in the process of rolling out their new pay model. They tested it in several markets including my own, and appears to have introduced it now nationwide. They had a lot of criticism in their previous model as the structure could easily be interpreted as Doordash stealing tips. The old model supplemented lower tip orders but also had an incredibly low $1 base pay.

Base pay with Doordash

Doordash's new base pay ranges between $2 and $10. They say they calculate it by duration, distance and desirability. Doordash does not make that formula public, meaning there is no transparency. Ultimately they could throw a dart at a dartboard to determine base pay for all we know. My observation so far is that distance and duration do not seem to make a lot of difference in the base.

I speculated in the past that the new pay model would be similar to the old model when all is said and done, that they would supplement low tip orders now in the base pay. This is because of “desirability” part of the base. Desirability essentially means that if drivers are not interested in a delivery, then Doordash will bump the pay up to make it more desirable. Doordash provides no information on how desirability is calculated.

In the two weeks that I've delivered, the base pay has averaged $2.73 per delivery. This is low, but it is an improvement over the average of $2.21 that I was making when you added the old base to the low tip supplements that the old structure provided.

One thing to understand is that under either model (the old one and new one) Doordash does not pay for gas on top of delivery fees. That's the reality of an independent contractor: we're on our own for our expenses.

Tipping with Doordash

Tipping was at the heart of the criticism of Doordash's old pay model. The pay model was $1 plus tips, but if that total was less than whatever they calculated the minimum you should earn for a delivery, Doordash paid the difference. In the end, if someone tipped $4 or didn't tip at all, the driver would receive the same pay. The problem with that was, you didn't get paid more due to a tip in a lot of situations. The benefit was you weren't left out in the cold as much if there was no tip. This was the heart of the change in pay models.

Doordash has since revamped their pay structure so that there is an independently calculated base pay, and then you get tips and promotions on top. Doordash does a good job encouraging customers to tip and historically, tipping has happened when a customer places the order. People are used to tipping at the point of payment, so I do believe this is a better approach. Doordash announced they will introduce an option to tip after the delivery, which I think will be good.

Incentives with Doordash

The main incentive that Doordash uses is peak pay. When the demand is higher than normal, Doordash will offer a per-delivery bonus. I have seen this be scheduled as well as on the fly, depending on demand. In the past, peak pay was usually limited. What I mean is, you would have to accept a certain percentage of orders or accept a certain number of orders in a time period to receive the bonus. More recently a lot of these restrictions have been removed.

Peak pay has had a way of making Doordash extremely competitive in what you could expect to earn. It seems to be lower lately under the new model. I think this may be because they now have more flexibility to increase pay on individual deliveries as an incentive, and so I expect they may utilize a blanket peak pay less in the future.

Doordash has also announced they will be introducing other incentives, such as challenges or consecutive order bonuses. I would imagine many of these will be introduced to encourage higher acceptance of the lower pay offers.

Overall observations on pay

To me, it's the use of the incentives that is giving them a big advantage over Grubhub right now. Doordash seems to have a lot more flexibility when it comes to encouraging drivers to get out during busy periods. While my experience with the new model so far has been improved, I still feel that their base pay is too low, Frankly starting at $2 is an insult. When it is all said and done, they still pay lower on a per delivery basis than Grubhub, however tipping is more consistent than Uber Eats and Postmates.

What about the Doordash app?

You know the line about the good, the bad and the ugly? When it comes to the app, my opinion is there is no bad: It's either good or it's ugly.

Information provided (the good)

THIS is the good. Doordash was already superior to anyone else in what information they provided to drivers, but the new pay structure has increased their lead substantially. In the past Doordash only provided a ‘guaranteed earnings' amount with a delivery offer, but under the new structure they display actual earnings.

Doordash is up there with Grubhub in providing information such as the restaurant name, a map of the location, and the amount you can earn on a delivery. There are additional things that give Doordash a huge advantage now:

• Total miles (including distance to the restaurant). No one else provides this information.
• How many items on an order
• Expected ETA. I find Doordash to be pretty accurate in this, and gives you a good idea where you are in the order process such as if you can expect a long wait at the restaurant.
• If your phone is compatible, they have a floating widget that provides details on the order itself AND the delivery address, AND customer instructions, which you can see before accepting an order.

Honestly, I'm not sure of anything more I would add. I've heard from some who would prefer to know how much of the offer was the tip, but to me that's a non factor. To me, it's all about how much can I expect to earn per minute, and Doordash provides the best information of anyone to help me make a reasonable estimate.

The function of the app (the ugly)

Seriously folks, I am thoroughly unimpressed with the developers of the app. The functionality is horrible.

It starts with being notified of a delivery. It's terrible. Other platforms will chime or ring a bell. Doordash triggers your notification sound over and over until you respond. I stream music or podcasts a lot, and that notification will actually kill those apps. The app will frequently freeze the notification mode and you have to force stop the app or sometimes reboot your phone. It's really bad. And it's been this way on three different phones.

There's a running joke in the Doordash community that a new feature is going to mean a system crash. It isn't really a joke, Doordash has had that much trouble with system crashes. They have problems with the ratings systems, with the app locking drivers out, with the customer app. Maybe instead of spending $30 million on a ballot measure in California, Tony Xu should invest that money into building a new app from scratch. As long as it continues to provide the information it provides, that is…

What are deliveries like with Doordash?

For the most part I'm pretty satisfied with how the deliveries go with Doordash. I do not like the order and pay deliveries, but I find that the solution is pretty simple there: Just say no.

Order Efficiency

Doordash does one thing different than others in dispatching: they use a sub-region dispatch system. With other platforms dispatching is market-wide. Doordash divides your market up into regions, and you can easily switch from one region to another. Some say they like this because you usually get shorter deliveries, though I haven't noticed that to be true. I feel like it limits your delivery offers. If you are close to the border of your region you often won't get offers close to you but across that border. The other problems is that if you are trying to work that region, you have dead time heading back if your delivery is to a customer outside the region.

I find that dispatching seems to be more of a shotgun approach where the determining factor is more on whether the restaurant is in your region than if it's close to you. Doordash will still send you offers outside your region, sometimes far, far outside your region. With that said, I also find that their system tends to come back with other offers much quicker than a lot of platforms, so you can deny the offers that don't make sense and still quickly pick one up that does.

Wait time used to be a real issue with Doordash, but I think that has improved lately. But this is where having the ETA in the offer screen is so helpful, in that you get a lot better idea of what stage in the delivery you are in and whether you might expect a long wait.

A note on scheduling delivery times

(Added in a later edit) I had a good comment that mentioned that a big item I left out was related to schedules. He was right, that's an important thing to think about, important enough that I thought it was worth adding a note later.

One thing that Doordash does that is very different than anyone else is in the way they cap the number of riders in a region for any particular part of the day. For example you might only have 20 dashers able to log in downtown between 5 and 7 PM and 15 can log in a suburban region during a set time frame. I think it's good that they do this in that it helps prevent over saturating any particular region with drivers. Because of their sub-regional structure mentioned above, it allows them to have better control on the distribution of drivers. That part makes sense.

In the past few months, Doordash has been emphasizing pre-scheduling these time slots more and more. As an incentive, couriers with good statistics have earlier access to setting their schedule. This seems to take a page from Grubhub's book. In some markets it's more necessary to get on a schedule early if you want the opportunity to dash at all.

I do think that it's better that they limit the number of Dashers in a region at a time. I like the Dash Now flexibility that they have. In markets where you need to pre-schedule, I think this can work against the driver's favor. Some will schedule huge blocks at one time, and that limits flexibility during the day. The other issue mentioned in the comments is the structure of the scheduling blocks isn't a great one for a precise schedule. One problem when you scheduling longer time periods is that while you do have the option to pause if needed, your total pause time for your scheduled block is only 35 minutes.

If your market requires you to schedule a block, it also be more inefficient. As I mentioned earlier, if you are focusing on a sub region, any delviery that takes you out of that region often means wasted time and miles getting back to your region, instead of just picking up orders right away in that particular region.

Multiple orders

I've heard complaints from people in other markets that multiple orders are really inefficient. I don't know if that's more of a problem in slower markets or what, but my experience here has been pretty positive. When there's more than one order from the same restaurant, it's more likely that the customers are close together. What has maybe impressed me the most is that they seem to be really good at matching up a delivery from another restaurant in the area where the pickups and the dropoffs are very well in line with each other.

I have found that Doordash works well as a multi-app partner. What I mean is that because of the kind of information they provide, if I am on a delivery on another platform I can often find a delivery option from Doordash that fits in nicely and doesn't slow me up on the other platform.

Does Doordash Respect the Independent Contractor Relationship?

Overall, I would say that Doordash is pretty good in this respect. They don't put the kind of pressure on people for acceptance rate that some of the others do, and in fact they specifically state you cannot be deactivated for low acceptance rate. I understand that they were once much worse at that prior to a $5 million misclassification lawsuit settlement in 2017. For me, I feel less pressure to ‘behave' with them than say Grubhub.

I believe that with any of these companies our agreement is a delivery by delivery thing. The agreement is in effect as soon as we accept a delviery and it ends once that is complete. We cannot be expected or required to do anything outside these limits such as an acceptance rate. I think Doordash respects that. But we do have a commitment once we accept a delivery offer, and that's why I don't have as much issue with Doordash's deactivation policy in relationship to customer rating or completion rates.

If there is a grey area, it's that some feel that Doordash micromanages the delivery process. They use notifications to keep tabs – what's the status of deliveries? Make sure you have condiments. Things like that. They have tighter delivery windows than other apps in my experience, you need to be done quicker. My sense is that this is more about emphasis on good customer experience than on controlling the driver. I could be wrong.

How is Doordash's Driver Support?

It's not great. It's not horrible but far closer to horrible than great. Great support is nonexistant in this industry.

Doordash does often have a local office, however accessibility is often an issue. They do not have a dedicated driver support team but use the same overseas call center to support both drivers and customers. There is often a language barrier and I do not get the feeling that staff is very thoroughly trained. I get the sense that they are given a situational script and aren't prepared for anything outside that script.

I do like that there is an option to either use the chat function or call. If I'm waiting at a restaurant, chat seems to work better but when driving, using the phone is better. For awhile it seemed a little more difficult to find the support options, but they do seem to have improved that functionality.

Overall Impressions on Doordash.

This is obviously my own opinion. I'm sure yours will vary.

Doordash has fluctuated a lot in where I utilized them. They've always been a good secondary option for me. In the past, the $5.50 guarantee pay that was on most orders just wasn't enough to make a lot of orders acceptable. Now that they are making more information available, I am finding more times where I'm willing to make them my primary source and move others down to secondary. In the past I used to rely on them mostly when there were good peak pay bonuses, but under the new model I'm finding them to be a good option much more often.

Edit (added when I added the part above about scheduling): One thing that can impact the value of delivering with Doordash would be the ability to schedule deliveries in your market. If you are in a market where you have to pre-schedule your delivery times to get a shot at even being able to deliver, you are probably more likely to want to evaluate whether Doordash is sufficient as a primary delivery choice. I think you are more likely having to commit to Doordash first and anyone else is second. That may or may not work for you. At the same time, if Doordash is hard to get scheduled with, that might be your signal that you need to concentrate more on someone else.

The information that Doordash provides is the best, and this gives them a big advantage. The pay is slightly lower, however I'm often finding them to be more profitable because it's easier to find short profitable deliveries. Their app issues and poor support continue to hurt them. I'm not sure I could be ready to make Doordash my primary source of income, but they have moved up as an option to where they'll be better able to give Grubhub a run for the money.