DoorDash is finally changing its controversial tipping policy after a widespread backlash from both the public and DoorDash drivers. Last month, CEO and cofounder Tony Xu announced that the company would change its policy, but few details had been released. Now, the company has provided a breakdown of how the new policy, slated to begin in September, will work for its delivery drivers.
The company is making the changes in response to immense pressure over its policy of pocketing customer tips to cover base pay for deliveries. Since 2017, DoorDash has used tips from customers to subsidize minimum payouts the company guaranteed for its delivery workers. For example, if the company promised to pay $6 upfront for an order and the customer receiving that order tipped $3, the delivery driver would still only earn $6 for the delivery.
Working Washington, a Seattle-based workers’ rights organization, called out DoorDash’s tipping policy in February. Some customers felt that they had been tricked into lowering the company’s costs for delivery drivers when they intended to provide a bonus to the driver for good service. Since then, a class-action lawsuit has been launched against DoorDash over the policy and the San Francisco Office of Labor Investigations has opened an investigation into the matter.
Under the new policy beginning next month, every dollar customers tip will be given to the delivery driver on top of the base pay for the delivery. The minimum base pay for a delivery will increase from $1 to $2, with the potential to be as much as $10. The base pay for each delivery will be determined by “estimated duration, distance, and desirability,” according to a blog post by the company. Xu commented on the changes, saying, “Under our new model, Dashers will earn more money on average – both from DoorDash and overall.”