DoorDash is using some Silicon Valley buzzwords bullshit language to disguise the fact that they are effectively stealing tips by not disclosing how their payment system works to the customer, who is not informed that increasing the amount they tip doesn’t usually increase the amount of money the driver gets. Getting through their weasel language to figure out what actually happens is more math than most people want to do for no reason, which is probably why they have gotten away with this for this long.
This is the publicly listed DoorDash payment policy for their drivers:
DoorDash will show you the guaranteed amount you’ll earn for completing a delivery before you choose to accept or reject that order. The guaranteed amount is based on a variety of factors including the size of the order, whether you have to place the order in person, and the projected driving distance, traffic, parking, and wait time at the store.
For each delivery, you will always receive at least $1 from DoorDash plus 100% of the customer tip. Where that sum is less than the guaranteed amount, DoorDash will provide a pay boost to make sure you receive the guaranteed amount. Where that sum is more than the guaranteed amount, you pocket the extra amount.
Oh a “pay boost” that sounds so generous! Lets see how that math works out in reality. Here are three different scenarios calculated for various values as the “guaranteed amount: ”
Any normal conception of “tipping” would mean that that last column should be increasing when the customer specifies they want to tip using the app. But it doesn’t do that at all for values that are more likely to be the “guaranteed amount” and even for lower values the increased amount to the driver is less than you specify in the tip.
The darker red rows represent when the customer does not tip at all, the lighter red rows represent when the customer tips $4.50 (15% of $30.00) using the app, and the green rows represent when the customer tips the same amount using cash.
The case of the “guaranteed amount” being $1.00 is invalidated because that’s already the amount DoorDash pays at minimum and if that were the case they would definitely be violating minimum wage laws.
Starting from the next lowest possible “guaranteed amount,” here’s what happens:
When the customer doesn’t tip, the driver gets $2.00, which DoorDash pays entirely. When the customer does tip, using the app, the driver gets $5.50, which exceeds the “guaranteed amount,” meaning DoorDash pays the minimum of $1.00. But if the customer tips using cash, the driver gets $6.50, and DoorDash pays them $2.00.
What this effectively means is that if you tip using the app vs tipping in cash, DoorDash is redirecting $1.00 to themselves. This is already extremely deceptive as the customer would not expect there to be a difference between tipping in cash vs tipping using the app, as the app says “100% of tips go to the driver.” It only gets worse using higher values.
It’s likely that the ”guaranteed amount” is higher than $2.00. As it goes up, the amount DoorDash is taking increases. Once it reaches the amount the customer tips using the app, it starts repeating the same pattern, so we can look at a “guaranteed amount” of $6.00 to represent what is both more likely a realistic value “guaranteed amount,” and also much worse for the driver and customer.
When the customer doesn’t tip, the driver gets $6.00 which DoorDash pays entirely, same as at any “guaranteed amount” value with no tip. When the customer tips using the app the amount of money the driver gets does not increase at all. It remains $6.00, but DoorDash only has to pay $1.50, meaning you are tipping the company, not the driver. This is not how people understand the concept of tipping, when you are paying someone a tip you expect it to go to either that specific worker, or pooled among a group of workers.
The only way that a customer can actually increase the amount of money the driver is being paid is to tip in cash, which results in the driver getting $10.50, which effectively means DoorDash is stealing $4.50 from… someone. I genuinely don’t know who it’s robbing when you try to give someone money and a third person takes it, but it’s definitely a crime.
The most charitable interpretation of this payment scheme is that it’s tipped minimum wage, a common restaurant practice where the base rate is below minimum wage, and if you don’t make enough tips to meet minimum wage, the restaurant fills in the gap.
This comparison is flawed for 2 reasons:
1. In the physical restaurant scenario, there is no discrepancy between tipping in cash and tipping using your credit card.
2. Tipped minimum wage is against state law in both the state I am in (Washington) and the state DoorDash is based in (California.)
DoorDash also can’t claim that their drivers are “independent contractors,” as they were previously successfully sued in a class action lawsuit over that claim.
Don’t use DoorDash, and if you have to, tip with cash.
