DoorDash’s New Tipping Model Boosts Base Pay, Protects Tips

DoorDash has announced that it has a new pay model that aims to boost delivery workers’ earnings from the app.

“We developed this approach with input from customers and Dashers, including members of our Dasher Community Council. We have been testing the new model this month and refining the details based on feedback we’ve received from Dashers. We’ll continue to make improvements as we roll it out to all Dashers next month,” Tony Xu, co-founder, and CEO, wrote in a blog post.

Under the new model, base pay for delivery drivers will now range from $2-$10-plus per delivery depending on the duration, distance and desirability of the order. Deliveries that are expected to take more time, that require a longer distance, and that are less popular with Dashers will have higher base pay.

In addition, Dashers can earn more through promotions such as Peak Pay and Challenge Bonuses that will roll out in the coming months. As for tips, customers will be able to add a gratuity at checkout or after the delivery.

“The amount DoorDash pays in base pay and promotions will never vary based on the tip amount. Tips left at checkout will be shown as part of the Dasher’s guaranteed earnings when the Dasher is offered a delivery, and any tips provided after the delivery will also be added to the Dasher’s earnings,” wrote Xu.

Xu also defended his company’s decision not to change its policies until now. “We thought we were doing the right thing for Dashers by making them whole if a customer left no tip,” he wrote, “but the feedback we’ve received recently made clear that some of our customers who were leaving tips felt like their tips didn’t matter.”

Earlier this month, it was reported that DoorDash is hoping to secure a $400 million credit line ahead of its upcoming IPO. JPMorgan Chase reportedly will lead the financing, and shares could be offered as early as next year.