It’s widely assumed that the full amount of the tips food delivery workers get, they also keep in full but that has not quite been the case with food delivery company DoorDash.
Apparently, the company kept the worker’s tip as part of the price of an upfront order. Just to make things more clear: DoorDash drivers received a payout for every order, upfront. That was a $1 guarantee as well as a compensation that was calculated by an algorithm. If a driver was told they would make, say, $5 upfront for an order, that is the minimum they will receive.
However, if the customer who got the order decided to give the delivery worker a tip of $3, the company would actually treat that tip as part of the guaranteed $5 order. At the end of the day, the worker would still only receive the $5 and nothing else on top of that.
The drivers would only get an actual tip if the customer they delivered the order to happened to be very, very generous with it.
At the end of the day, the customers ended up giving more money to DoorDash instead of actually tipping the delivery guy for his work.
After this situation was brought to light, the company received a slew of complaints from the customers which led DoorDash CEO Tony Xu to announce he will change the tipping model.
According to Xu “we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible. But it’s clear from recent feedback that we didn’t strike the right balance. We thought we were doing the right thing by making Dashers whole when a customer left no tip. What we missed was that some customers who *did* tip would feel like their tip did not matter.”
Xu added in a series of tweets that the company “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. Going forward, we’re changing our model – the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days.”
Xu’s Twitter thread did not mention how exactly the company’s policies on tipping will change so it’s unclear at this time if it will adjust its guaranteed rates or if it will implement actual changes that will truly end up making a difference for its employees.
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