There’s a catch with DoorDash’s hourly rate for delivery workers

DoorDash announced on Wednesday that it will offer delivery workers the choice to be paid a guaranteed hourly minimum rate instead of being paid per delivery. This is a unique offering in the gig worker industry and is in response to a new New York City mandate that requires app-based gig companies to provide delivery workers with a guaranteed minimum wage of $18 per hour.

However, it’s important to note that this hourly rate is not actually an hourly rate. It is based on the time spent on a delivery, including the time from accepting an offer to dropping off the order, as well as 100% of tips.

DoorDash developed this new option, called “Earn by Time,” with Dashers who prioritize reliable earnings in mind. Previously, labor rights activists and gig workers criticized DoorDash for only paying workers for “active time,” which didn’t account for the time spent waiting for orders. The NYC mandate now requires companies to pay workers for all the time they spend connected to the app.

The specific hourly minimum rate that DoorDash will offer Dashers is unclear, as the company did not respond to inquiries. DoorDash has been testing this pay model in some smaller cities across the U.S.

Some gig workers are skeptical of this new offering, calling it a “watered-down version of Prop 22 with restrictions,” referring to a California ballot initiative that passed in 2020 and allows gig companies to classify their workers as independent contractors. They accuse DoorDash of using hourly pay as a way to incentivize workers to accept orders they would normally reject for low base pay.

The guaranteed hourly rate will be shown to Dashers at the start of a trip so they can see exactly how much they will earn per hour. DoorDash claims to have invested significantly in creating a rewarding option for Dashers who prioritize consistency in their earnings. Dashers who accept more orders are likely to receive a higher hourly rate. DoorDash, Uber, and other gig companies are known for rewarding workers who consistently accept trips and punishing those who don’t.

While the hourly pay option is now available, Dashers still have the traditional option to earn per offer. In this option, the guaranteed minimum amount that they can expect to earn on a trip is shown upfront.

DoorDash did not specify in which states and markets the “earn by time” offer will be available.

In addition to the hourly wage announcement, DoorDash also launched new features to help Dashers maximize their earnings. This includes “dash along the way,” which allows workers to select locations where they want to start fulfilling orders, and post-checkout tipping, which allows customers to add a tip or increase an existing one up to 30 days after a delivery. DoorDash also introduced a location sharing feature for Dashers to share their location with up to five contacts.

Lastly, DoorDash announced that it will give a one-time gift of $10,000 to Dashers who joined the platform in the early years, completed over 10,000 deliveries, and are still active on the platform. The exact number of Dashers eligible for this gift was not disclosed.

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