Yes, delivering for Doordash is self-employment. If you deliver for Doordash in the United States, you do so an an independent contractor. That's a form of self-employment
As a general rule, a Dasher (Doordash's term for a delivery driver on their platform) is an independent contractor.
There's some controversy around whether Dashers are misclassified, or whether Doordash is illegally using independent contractors. In late 2022, the Department of Labor has proposed a new rule that examines an employment relationship. Doordash would likely fail the test under that new independent contractor rule.
However, all of that controversy has yet to play out. Until then, Doordash Dashers are contractually self-employed.
Okay, but what does that really mean?
It's critical you understand the differences between an independent contractor and an employee. They are not just different versions of the same thing. Not understanding could create serious money problems, especially around tax time.
But even worse, misunderstanding the reality of being an independent contractor could rob you of the greatest potential of delivering for Doordash or for any food delivery services.
When you apply to be a Dasher, do not just check off on the part that says “I understand that I am an independent contractor” without fully knowing what that means.
The following are nine realities of being an independent contractor. It's critical that you understand these things. They are the difference between running a successful delivery business and being a highly disappointed employee wannabe.
- You are providing services for Doordash as a business
- You are not an employee
- Doordash is your customer
- Doordash can not control your work
- There is no safety net
- You are on your own for taxes
- Doordash delivery offers are a bid for your services
- You get to set your own price
- Your best strategy is to be your own boss
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After these nine realities, we'll look at a list of frequently asked questions about self-employment and Doordash.
As Independent Contractors we provide service to Doordash as a Business
That's pretty much the definition of being an independent contractor. You're doing something for a business as another business rather than as an employee.
Technically, legally, and contractually, this is a business to business relationship. Doordash has outsourced delivery work to us as small businesses.
Under current laws, if a a business needs work performed, they have two choices: Hire employees or contract out to a business. Doordash chose to do the latter.
I often refer to Doordash drivers as accidental business owners. The first thing that happens when you take your first delivery is you become a business entity. For most of us, that's a sole proprietorship, the legal term for an individual operating as a business.
If you want to form an LLC to deliver for Doordash you can do that. You could incorporate. Or you could simply be a sole proprietor.
That means it's up to you to provide the tools necessary for your Doordash deliveries.
There are some things Doordash does that aren't real consistent with contracting as a business. They still sign you up as an individual through your social security number. While you can use independent contractors, they still have to be signed up individually with their own Doordash accounts (at which you ask, what's the point?)
However, as everything stands right now, it's still a business to business relationship. Whether you FEEL like you're running a business or not, you're providing a service AS a business.
This one fact is critical to all the following realities.
You are not an employee
Because you are performing services as a business, it means you are not an employee.
Your relationship with Doordash is very different than an employee relationship.
You don't have any supervisor. Doordash is not your boss. This is not a delivery job.
Instead, your business is completing deliveries.
This means a lot of things. It means you can set your own schedule and make your own decisions. You could be a full time gig worker if you want. Or you can make this a side hustle. It's completely up to you.
You don't need to worry about performance reviews or an employee manual or anything like that. There are no office politics.
It also means you don't have a supervisor. Doordash support personnel are not your bosses.
Being a contractor in the gig economy can be really good news, and really bad news, depending on how you prefer to do things. It's good news because you have freedom to control your own destiny. It's bad news because you don't get the protections that an employee has.
We'll look at some of both the good and bad of being an independent contractor in following points.
The easy way to put it is this: If you want to be an employee, or you want the protections of an employee, you're out of luck. However, you agreed that you were not an employee.
Doordash is your customer
This is good news, in my opinion. Think about it: Doordash as your customer instead of your boss really changes the dynamic.
Think about it: Who exactly is a customer? It's whoever you provide the service for, who you have an agreement with, and who pays you when it's all said and done.
Doordash tries to spin things a little differently. They want to say they're not a delivery company, but instead they're a tech company that connects drivers, restaurants, and customers.
It's an interesting concept. However, in practice, there's nothing to it. You sign up with Doordash, not the customer. Doordash creates the agreement. Doordash pays you.
The truth is, no matter how Doordash spins it, they're your customer.
The moment I took this reality to heart, the better I felt about dealing with Doordash. If you read my other posts or listen to my podcast, it doesn't take long for you to figure out I have frustrations with how Doordash does things.
In a lot of ways, I feel like they want to rip me off.
But isn't that the reality in a lot of business/customer relationships? The customer is going to try to get by with as little cost as possible. Most don't care if your business is profitable. All they want is your product or service.
When you run a store, restaurant, or other business, that's a reality you live with. It's part of what you learn to work around.
But now the dynamic is different. Doordash isn't the overbearing boss. They're the shifty customer trying to get by on the cheap. I can say yes, or I can say no, OR I can move on to other customers.
Because I have the right to have as many customers as I want.
Doordash can not control your work
Here's where the law really comes into play.
There's a thing called misclassification. Laws are written to make sure that companies don't get around the responsibilities to their employees by simply calling them independent contractors.
There's a lot of debate about what should be in those laws, but there's one common theme in every definition out there of an employee relationship:
It doesn't matter if you're just doing some side jobs or are a full-time independent contractor, Doordash cannot control your work.
When they contract with you as a business, all they can do is require an end result. It's an on again off again business relationship that begins the moment you accept a delivery request, and it ends the moment you complete the delivery.
But when they chose to use Independent Contractors, by law all they can do is expect a result. You agree to complete a delivery that you accepted in a timely manner and to keep what you deliver in the best condition you can.
They can't tell you how to do it. Doordash cannot tell you when you should deliver.
A lot of Doordsh drivers worry about being fired (deactivated) for a low acceptance rate (accepting too low a percentage of delivery offers).
Don't worry. They can't. Doordash isn't allowed to tell you what you have to accept or how much you have to accept. That's entirely up to you.
There's a TON of freedom in knowing that.
There is no safety net+
Unfortunately, because you're not an employee, you have none of the protections that go with being an employee.
You have no guarantees.
It's just like if you decide to open a store. You can't open a store and expect that customers are just going to show up and give you their money because you're entitled to it.
If you choose to go out and deliver and don't make much money, there's nothing you can do. As independent contractors (business owners) we don't have any minimum wage protection. Overtime is not a thing for Dashers. Holiday pay, paid time off, FMLA, none of that apply.
Doordash has no insurance for you OR your car. If anything happens, you're on your own (and your insurance may not cover you). You have no unemployment benefits as a Dasher (the PUA unemployment during the pandemic was an anomaly) and there's no workers compensation.
If you want benefits like health insurance, life insurance, or a retirement plan, you have to provide it for yourself.
If you choose to do deliveries for Doordash, by agreeing that you're an independent contractor, you are agreeing that none of this is provided for you.
There's nothing wrong with wanting these things. A lot of people prefer employment because of all those protections and benefits. However, there's a problem when you agree that you are not entitled to any of these things but demand them anyway.
If you want protections, get an employment job that provides them.
You are on your own for taxes
This is the big thing. It's huge.
Taxes as a business owner or independent contractor can be very different than they are when you are an employee.
As a sole proprietor (or even as a single member LLC) your business is taxed through your personal tax return. The majority of businesses are actually taxed this way.
But the thing is, you are on your own. Doordash does not withhold taxes for you. This is something you have to do for yourself.
This is the part that gets most independent contractors in tax trouble: That also means you have to take out your own social security and Medicare taxes. For us, it's called self-employment tax and it's based on every dollar of profit you earn (it doesn't get reduced by standard or itemized tax deductions or change with tax brackets).
But there's a lot of good news in this. Because you're doing this as a business, your taxable income is your net profit. That is, it's what's left over after your business expenses. With as much driving as we do, we can claim a standard mileage deduction of 58.5 cents per mile (2022), and NOT on the higher gross income that you were paid by Doordash (or other platforms).
There are additional tax forms such as a form called Schedule C (which is where you list all your business income, expenses and decide your taxable profit). It can get pretty complicated and you may have to decide it's not best to do your own taxes.
We have a complete guide in our series of articles on Doordash taxes. It's not tax advice, but it covers all the different parts of how taxes work for independent contractors (both self-employment taxes and federal income taxes).
Doordash delivery offers are a bid for your services
Remember what we were saying above. Doordash is not allowed to require you to accept any particular delivery offers. Neither can they dictate that you have to accept a percentage of offers.
A lot of dashers feel like they have to accept every delivery that is offered to them.
And, in my opinion, you shouldn't.
Something else I said earlier is that the agreement you have with Doordash is on again/off again. It starts when you accept an offer and ends when you complete it.
Nothing in the independent contractor agreement requires you to accept any delivery.
Being an independent contractor means a different mindset about things like this than when you're an employee. As an employee, you can be assigned tasks.
But when you're providing services as a business, it becomes a business to business transaction. And the way it works for Dashers is that delivery offers are very simply a bid for your services.
Doordash sends you an offer on the Dasher app. It's them saying hey, we have this delivery available. It starts here, goes there, and it pays this much. The amount includes the delivery fee and customer tips, maybe some extra incentives like peak pay (and it may pay more). Will you accept this bid?
As a business owner, you have a right and responsibility to make decisions as to whether it makes business sense to take that offer.
If someone came into a high end restaurant and offered five bucks for their prime rib meal, does it make sense to take that offer?
Every single delivery offer is Doordash, as a customer, bidding a certain amount for you to complete a given delivery. As a business owner, you have the right to make your own decisions and accept or reject their bid.
You get to set your own price
In some ways, this is an extension of the last point.
A lot of people will tell you that you're not really a business because you can't set your own prices.
There's some truth to the fact that we really don't have a way to negotiate our rates. However, I've operated several business where I had no such ability. For example, I can't negotiate what I get for advertising on this website. I just agree to a program and get whatever it pays.
I will say that I have more freedom to set my price as a Dasher than I do as a website owner. With Doordash I CAN set my price.
I have a price in mind that a delivery should pay. If it doesn't meet my price, I reject the bid. If the bid meets my price, I'll accept it. My personal delivery preferences are based on a 50 cent rule: If I think I can get 50 cents per minute on a delivery, I'll accept it. For me it was the best way to evaluate bids from Doordash.
In fact, in your agreement with Doordash, you agreed that you can set your own price. This is the way they say it:
they are free to negotiate their compensation by among other things accepting or rejecting the opportunities transmitted through the DOORDASH platformfrom the Recitals section of the Doordash Independent Contractor Agreement (ICA).
In the end, your self employment income is determined by what you choose to accept or reject of the bids that Doordash sends your way.
But the most important thing about all this is, YOU get to set that price.
Your best strategy is to be your own boss
What this means is, you make your own decisions.
You take to heart that Doordash is not your boss, not your employer, but instead is your customer.
The best way to succeed with Doordash is to first adjust your mindset. Think of them as a customer bidding for your services.
You get to determine the best places and best times to deliver. You get to determine the best offers that are profitable for you. If you choose to accept more, that's a business decision. If you decide to take less, that too is a business decision.
YOU get to decide.
There's a lot of talk out there about whether Doordash is exploiting independent contractors. I do believe that they try very hard to get employee minded people at an independent contractor price.
However, I believe the best way an independent contractor can avoid being exploited is to first understand their rights as a contractor, and second embrace the role as a business owner.
Because all of a sudden, when Doordash isn't your boss, you are no longer dependent on them.
Doordash doesn't determine your ability to succeed. You do.
If they aren't offering worthwhile opportunities, another customer probably will. If no one is doing so, you have the ability to decide that maybe it's not the right business model for you.
But the thing I learned is, once I decided it didn't matter what Doordash wanted, that I had to operate my business how I saw fit, I began to thrive delivering for Doordash and others.
You may prefer employment. There's nothing wrong with that. Just understand that delivering for Doordash is NOT an employment position.
But if you decide to be the boss and embrace running your own business, you can really increase your ability to thrive.
Frequently Asked Questions about if Doordash is Self Employment
You'll find a lot of these questions have been answered above. However, I thought that it could be helpful to summarize it all with a question and answer format.
Is Doordash Self-Employment.
Yes. Those who deliver for Doordash do so as independent contractors, meaning you're providing services as a business. This means you are self-employed, running your own business instead of being a Doordash employee.
What kind of self-employment is Doordash?
That is entirely up to you how you want to run and structure your business. By nature, if you have not set up a business structure yet, you are a sole proprietor. That's the IRS's definition of someone who is in business for themselves without any kind of corporate structure or formal business entity.
Is Doordash Sole Proprietorship?
By default, a Dasher is a sole proprietor. The only exceptions would be if they created a business structure such as an LLC, S-Corporation or C-Corporation. Dashers can choose to do business as such a business entity. However, if they have not incorporated or created any other business structure, then yes, it is a sole proprietorship.
Is sole proprietorship and being an independent contractor the same thing?
While most independent contractors in the gig economy are sole proprietors, they are not necessarily the same. “Independent Contractor” defines the relationship. You are contracting with Doordash as an independent business to provide services. “Sole proprietor” defines the type of business: if you are in business for yourself without a particular business structure, you're a sole proprietor.
Is Doordash an Employee Relationship?
No. In the Independent Contractor Agreement, Dashers specifically agree that they are NOT employees but instead are providing service as a business. This means there are none of the usual employee protections. However, it also means that Doordash does not have the usual employee controls.
What type of job is Doordash delivery?
Delivering for Doordash is not a job, because it is an independent contractor relationship. While I don't like the sentiment that says Doordash isn't a real job, technically it's correct. However, it is a legitimate way to earn extra cash. In some cases Doordash and others can be a full-time living. It's just that it's done by operating one's own business rather than being an employee.
How do I report income to Doordash?
There's no real need to report income to Doordash. Doordash keeps track of the amount they offer to you to complete deliveries, and will pay you accordingly. As a general rule they are pretty reliable even though the Doordash driver app does glitch from time to time. Any income reporting with Doordash would be with the government for tax purposes, done through your personal tax returns at the end of the tax year.
Can I use a Business EIN (Employer ID Number) for Doordash?
Yes. As a sole proprietor you can create an EIN for your business. One inconsistency with Doordash is while they say they're contracting with you as a business, they sign you up as an individual including your Social Security number. However, you may submit a W-9 to Doordash so that they will report earnings based on your business EIN instead of your Social Security Number
Can I deliver for Doordash as an LLC
You may structure your business in whatever way makes the most business sense for you. A single member LLC is taxed the same way as a sole proprietor, so there aren't any real tax advantages. However there may be asset protection advantages to creating an LLC. With Doordash you still sign up as a driver as an individual, but you can then submit your EIN on your W9 form so they report the income as going to your business instead of individual income.
Should Doordash be using employees instead of independent contractors?
This one can be a can of worms. My personal opinion is yes, and no.
In my opinion, Doordash has their actual business operations operated entirely by independent contractors. Throughout this article I've been adamant that we should treat this as the independent contractors that we agreed that we are. This is not me saying their use of independent contractors is correct, but it's me saying that the best way to thrive is to embrace that role. I fully believe that if Dashers completely understood what it meant to be independent contractors, realized that there are no protections and guarantees, and were to decide NOT to sign up if they were not okay with that, Doordash would not have enough contractors. For that reason, I do feel like they are abusing the independent contractor relationship.
There is a lot of pressure out there trying to force Doordash into an employee model. Laws like AB5 in California were written specifically to target gig economy companies like Doordash. Dashers need to keep an eye on federal legislation like the PRO Act or on local laws because they can force Doordash into an employee model.
Frankly, I don't think new laws are needed. Just enforce the existing laws. Step in where companies like Doordash try to cross the line and control the contractors.
However, if were to move to an employee model, I would be done with Doordash. I refuse to let a company like them be my employer. I have no problem with someone I can't trust being my customer. However, as my employer, that's a different story. I personally choose to be an independent contractor precisely because it's an opportunity to control my own work. Losing that would be a deal breaker for me.
The introduction to the Doordash Delivery Series: An overview of all the things involved with delivering for Doordash as an independent contractor.
Doordash pays on a delivery by delivery basis, not hourly or on a salary. We look at the breakdown of base pay, incentives, and customer tips that make up Doordash pay.
What are the requirements to deliver for Doordash? What can disqualify you from Dashing? We look at Doordash driver qualifications and background checks.
We look at the process to apply at Doordash to be a delivery driver, what to think about before signing up, and tips to get off on the right food.
We look at how to figure out the best times for delivery for you in your market, looking at things like peak hours, events, and how to avoid driver saturation.
You make some good money when you deliver for Doordash, so you wonder if it makes sense to do it full time. We look at questions to ask yourself when thinking about it and some tips to help you be successful if you do go all in.
Understanding if you are at risk of being completely uninsured while delivering for Doordash. How Doordash insurance works and why most personal policies won't cover you when delivering.
What are the most important tools, accessories, and apps you must have as a Doordash delivery driver?
How the Doordash Top Dasher program works, what the requirements are, the perks, and whether Top Dasher is worth it.
When is a delivery worth accepting, and when should you turn it down? We look at acceptance rate, how it works and if it matters.
63 different strategies that may help you increase your profits as a Doordash delivery driver.
Doordash taxes are different because you are a self-employed independent contractor and not an employee. This is the first of a series of articles on different aspects of taxes for Dashers.
We talk about how Doordash driver support works, how to contact support, and what situations where you might need some help from the Dasher care team.
Customer rating is an important part of being able to continue delivering, and an important qualification for Top Dasher. We look at tactics to help you improve your rating.
Dashers are not employees, however you can have your contract deactivated if you don't do what you've agreed to do, which is deliver the items in a satisfactory manner.
I give my thoughts on what it's like delivering for Doordash after more than four years as a Dasher including pros and cons of delivering for Doordash.