DoorDash gives delivery workers a choice: get paid by the hour or by the gig

The earnings option — which a company blog post called “industry-leading” — comes out of worker feedback the company has collected over the past year, a DoorDash executive said.

“We’ve heard choice is the overarching narrative,” said Cody Aughney, the vice president who heads the Dasher and logistics business teams at DoorDash, in an interview with MarketWatch on Tuesday at the company’s headquarters in San Francisco. “When, how and where they earn. Flexibility is key.”

Related: DoorDash worker gets $10,000 gift from the company: ‘I almost started crying’

Like other gig companies, DoorDash considers its couriers independent contractors, so they have not been subject to local, state or federal minimum wages that are required for employees. But some cities and states, like Seattle, California and New York City, have already approved or instituted minimum guaranteed earnings for delivery workers — and it’s possible this change could affect gig-work-related legislative efforts elsewhere.

Aughney denied that the change was related to concerns over legislation or policy changes, but said the earnings options won’t be available in places that already have earnings minimums.

Workers who choose to earn per offer receive base pay that depends on time, distance and “desirability” of an offer; any bonuses that might apply; and tips. For workers who choose to be paid by time, the minimums will be based on “active time,” which starts when they accept a gig and ends when the delivery is completed. The amount of the minimum guarantee will depend on the market, according to the company, which stressed that workers will continue to receive 100% of tips.

Aughney said the company wanted to give the delivery workers a choice, but that the goal is for the earnings to be “roughly” the same. “It’s a choice between how they earn, not how much,” he said.

Delivery workers will be able to toggle back and forth between the two earnings choices at the start of each gig, he said.

The earnings-options change also benefits DoorDash in another way, since some delivery workers who choose the “earn by time” option may accept or have to accept orders they previously wouldn’t have. That could cut down on orders that delivery workers don’t want to claim because they’re low-paying or too far away.

Some delivery workers who have already tested the option to earn by time have complained in online forums or on social media that they’re unable to decline as many orders as they want under that choice, while others have said the company is prioritizing those who choose to earn using the new way.

Aughney stressed that the company wants to give delivery workers a choice and “meet Dashers where they are,” and said the company hopes to roll out the earnings options in 80% of U.S. markets (where there is no existing wage legislation) by the end of the year.

The company is also introducing a new feature that allows delivery workers to receive orders in certain areas during a commute or trip. The workers will be able to designate zones in which they want to deliver during certain times, which Aughney said is meant to minimize downtime, maximize efficiency and boost their ability to earn.

Another change: Delivery workers will be able to receive new or additional tips up to 30 days after an order. Customers can still tip at checkout, but they will also gain the ability to send a new or bigger tip afterward. They will not be able to take away or reduce a tip.

“A lot of times Dashers go above and beyond, like the Dasher who climbs three flights of stairs to deliver pizza to someone who couldn’t do that,” said Rajat Shroff, the head of product and design, during the company’s announcements Tuesday. Or maybe a delivery worker tried really hard to find substitutions for a customer they were shopping for, he added.

Aughney said he has talked directly to delivery workers, by email and by phone, to hear their concerns. He said the company also listened to the Dasher Community Council, a rotating group of delivery workers who serve six-month terms as representatives of their colleagues. And like other DoorDash employees are required to do, Aughney said, he does deliveries once a month himself.

“You learn a lot,” he said. “The things you learn when doing a delivery are the small things that may not come up during a phone call [with a Dasher]. You can notice the entire experience.”

The company also is introducing a feature that allows delivery workers to share their real-time location with up to five people. Aughney said it’s the latest of 11 safety features for delivery workers the company has introduced in the past several months.

In announcing what the company called its biggest update ever for its app this week, DoorDash also unveiled changes to its customer app, including a universal search bar that allows consumers “to search for anything you need from anywhere on DoorDash in your shopping journey”; the ability to have multiple shopping carts; and support for SNAP (Supplemental Nutrition Assistance Program)/EBT (Electronic Benefits Transfer) payments.

For merchants, new features include a way to implement a rewards program for customers.

Read more: The number of gig workers murdered on the job hits highest level since 2017, report says

From the archives (September 2021): DoorDash, other delivery workers receive sweeping protections under New York City laws