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Does DoorDash Rip Off Its Drivers?

In the last six years, food delivery platforms—such as DoorDash, Grubhub, and Uber Eats—have rocketed in popularity. According to McKinsey & Company, “[F]ood delivery has become a global market worth more than $150 billion, having more than tripled since 2017. In the United States, the market has more than doubled during the COVID-19 pandemic, following healthy historical growth of 8 percent.”

The growth of online ordering has inevitably led to an increase in the number of delivery drivers.

However, many of these new drivers are starting to question whether they’re being ripped off by their employers.

According to Kellen Browning from The New York Times, “Even for savvy drivers, trying to earn a living is often demoralizing and unpredictable, though the companies they work for are growing. In its most recent quarterly earnings report, Uber said its delivery business generated $14.3 billion in sales, a 6 percent increase from the same period a year ago. DoorDash reported $14.4 billion in sales, up 29 percent from a year prior.”

What many customers might not know is that DoorDash drivers (Dashers) are independent contractors, meaning that they are considered self-employed, and therefore can decide where and when they want to work.

But this also means that DoorDash isn’t required to pay its drivers minimum wage or offer other compensation.

Gibbs Law Group explained that a class action lawsuit has been made against DoorDash because the company “is mislabeling its drivers as ‘independent contractors’ to avoid paying drivers what they are owed under their state’s labor laws. In certain states, companies are required to pay: 100% of tips + minimum wage + overtime + mileage reimbursement.”

Reporting on the class action lawsuit, Top Class Actions said, “[D]ashers are allegedly penalized for trying to take only high paying or low distance orders, potentially facing deactivation of their account for failing to take on more assignments.”

Essentially, Dashers are expected to accept orders that do not offer proper compensation. If they don’t accept low paying orders, they risk losing out on being offered high paying orders, or even losing their Dasher status altogether.

But all of this poses another question: are customers contributing to ripping off food delivery drivers?

DoorDash offers its drivers a base pay that is calculated based on time, distance, and how urgently an order is requested. This compensation ranges from $2 to $10+, but is the lower end of this range fair?

Take the following example: a customer places an order for two coffees at a restaurant that is a couple of miles away from where they are located. The restaurant is close, so the customer figures that they don’t need to include a tip because DoorDash will offer enough payment for the Dasher.

But what the customer doesn’t know is that their order pops up for the Dasher as totaling $2 for their work. The Dasher accepts the order because DoorDash will lower their acceptance rating if they don’t.

The Dasher begins driving toward the restaurant. It’s supposed to be a three minute drive there, but it takes eight minutes due to traffic congestion. The Dasher arrives at the restaurant, which they realize is busy. The order for two coffees isn’t ready for another five minutes. At this point, the Dasher is earning about $2 for a quarter hour of work, which would be equal to earning $8/hour.

When the order is ready to go, the Dasher heads out to their car and begins to drive toward the customer’s location. Traffic is still bad. It takes eleven minutes to battle through traffic, arrive at the correct location, and leave the order at the customer’s door. What seemed to be a quick and easy order has turned into an earning of $2 for almost half an hour of work.

The customer rates the Dasher’s service and gives them two stars because the coffee was cold.

Ridester provides the following suggestions for how customers can calculate fair tips for food delivery drivers:

  • Small order ($3 coffee): $4-$5 tip
  • Regular order ($30) and excellent service (20%): $6 tip
  • Big order ($60) and the driver traveled during a rainstorm (25%): $15 tip

If the customer in this imagined scenario had followed these guidelines, the Dasher could have earned at least $6 for almost a half hour of work.

But is it fair to place most of the monetary responsibility on the customer? Considering Dashers are working for DoorDash—allowing the company to make so much money from their hard work—shouldn’t DoorDash be responsible for making sure their Dashers receive fair compensation?

DoorDash recently made efforts to offer Dashers different ways of earning money, such as the Earn by Time mode which, at face value, seems more advantageous for Dashers. But many are wary of the new mode which permits Dashers to reject only one low paying order per hour, and doesn’t pay Dashers for the time that they spend waiting for an order to come in.

For now, it seems that DoorDash isn’t quite the dream hustle that it appears to be.

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