Food delivery app DoorDash has, for months, Twitter to announce some unspecified changes to its compensation model.
Here’s how it worked. DoorDash offers its delivery drivers a guaranteed payout for each order, upfront — a flat $1 per order plus additional compensation calculated by some kind of malign algorithm. So if a driver is told they’ll make $11 upfront for an order, they’ll always receive at least $11. But if the customer receiving that order gave the driver a $6 tip, DoorDash would treat it as a credit towards the originally guaranteed $11, meaning the driver would still only get $11. The only circumstance in which a customer’s tip would actually go to the driver is if it was very generous.
In other words, DoorDash customers were essentially conned into tipping DoorDash, not the driver. This is vaguely similar to the tipped model for many restaurant employees across the country who have tips applied towards a portion of their minimum wage standard, except abstracted through an app and imposed on a contract workforce with few labour protections. Most restaurants also didn’t have an estimated valuation of $US7.1 ($10) billion in February 2019.
While DoorDash has previously stood by this policy even under withering criticism, it would appear that the company has finally had it up to here with the proles whining. Sort of, kinda, maybe.
On Wednesday, Xu tweeted that DoorDash “missed” that their policy of tip-shaving would make some customers feel like tipping “did not matter” — which could be generously described as a non-apology — and that after a year of ambiguous “research,” the company will now implement a “new model [that] will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order.”
1/ After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible.
— Tony Xu (@t_xu) July 24, 2019
3/ We did not launch our current model to pay Dashers less. In fact, when we moved to it, our average contribution to Dashers stayed the same.
— Tony Xu (@t_xu) July 24, 2019
5/ Customer obsession and getting 1% better everyday are core values at DoorDash. These beliefs have led us to improvements in the past and they serve as our guide for the future.
— Tony Xu (@t_xu) July 24, 2019
Notably absent from Xu’s thread is any contrition for its practice of ripping off its underpaid labour force. It is also unclear whether Xu’s statistic that DoorDash’s “average contribution to Dashers stayed the same” since it started pocketing portions of tips in 2017 includes the pocketed tips as part of Doordash’s “contribution.”
(By the way, DoorDash explicitly stated in a blog post in 2017 that internal “tests” of the tip-skimming model “showed that more Dashers earn more money.”)
Xu also did not go into further details on the policy changes, leaving it unclear whether DoorDash’s supposed end to tip-skimming comes with a giant asterisk — for example, adjustments to its guaranteed rates that could easily leave DoorDash contractors making the same amount of money as they do now or less, or some other more subtle form of fuckery.
Gizmodo has reached out to DoorDash for comment, and we’ll update this post if we hear back. By the way, good luck on that San Francisco Office of Labour Investigations investigation.