- DoorDash plans to update its tipping and pay policies in the wake of criticism from workers and customers, its CEO said Tuesday.
- Under its current model, tips are sometimes counted toward a worker’s guaranteed minimum pay, which some customers have called misleading.
- Going forward, CEO Tony Xu tweeted, earnings will always increase by the amount a customer tips.
- Visit Business Insider’s homepage for more stories.
DoorDash is changing its pay model after customers and workers accused the delivery company of stealing tips, CEO Tony Xu said on Twitter late Tuesday.
“After a year of research and conversations with thousands of Dashers, we built a pay model to prioritise transparency, consistency of earnings, and to ensure all customers get their food as fast as possible,” he said of the current model, in which tips sometimes go toward a worker’s base pay rather than as a bonus.
That model, implemented in 2017, garnered viral criticism this week when a New York Times reporter noticed the practice during a few days working as a bicycle deliveryman.
As the Times reporter highlighted, the model uses an algorithm to determine a guaranteed minimum pay for a given delivery. That algorithm takes into account a worker’s distance from a restaurant, the delivery distance, the order cost, and more. If a worker’s base pay falls short of the guaranteed minimum, however, any tips are first used to make up the difference.
“It’s clear from recent feedback that we didn’t strike the right balance,” Xu continued, noting criticism from customers he said felt their “tips did not matter.”
“Going forward,” he concluded in the Twitter thread, DoorDash’s new payment model “will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order,” with more specifics to come shortly.
The move was too little, too late in the eyes of some. The Vanity Fair writer Nick Bilton replied to Xu asking: “So are you going to return all the tips you stole from poor delivery drivers over the past year?”
So are you going to return all the tips you stole from poor delivery drivers over the past year?
— Nick Bilton (@nickbilton) July 24, 2019
In the wake of the DoorDash controversy, Business Insider reached out to eight of the largest gig-economy startups to ask about their tipping policy. None worked like DoorDash’s. You can see what the companies said here.
“Customer obsession and getting 1% better everyday are core values at DoorDash,” Xu said. “These beliefs have led us to improvements in the past and they serve as our guide for the future.”
- More DoorDash news:
- DoorDash is under fire for its controversial tipping policy. We asked Uber, Lyft, Instacart and other gig-economy startups how much of your tips go directly to their workers
- This chart shows why your DoorDash delivery worker isn’t getting the tip you leave
- DoorDash uses a shady tactic that stiffs workers out of some tips and customers are furious