DoorDash announced last month that it would change its controversial tipping model. Today it reveals the basics of how the new system will work.
Under the previous model, Dashers (DoorDash drivers and other delivery people) was guaranteed a minimum payment per delivery, with DoorDash paying a base of $ 1, and then providing an additional payment increase when a customer's tip was not enough to meet minimum – a system that made it seem like tips were used to subsidize DoorDash payments.
Under the new system, DoorDash will pay a base between $ 2 and $ 10 (the amount will depend on things like delivery distance and duration), with additional bonuses from DoorDash.
Most importantly, as CEO Tony Xu put it in a blog post, "Any tip for dollar customers will be an extra dollar in Dasher's pocket."
Well, you might think so the tips are always should work, but Xu said the old system was developed "in direct response to feedback from Dashers," while the new one will result in "greater variability in total revenue from order to order" (that The variability is one of several reasons why tipping is generally an incorrect compensation model).
So why change?
“We thought we did the right thing for Dashers of something that made them whole if a customer had no tips, but the feedback we received recently made it clear that some of our customers who gave tips felt that their tips didn't matter, "Xu said." We realized we couldn't continue to do well by Dashers if some customers felt that we didn't did it right of them. To ensure that all of our users have a great experience at DoorDash, we needed to achieve a better balance. "
Plus, he said," Dashers will [now] make more money on average ̵
The company plans to implement these changes to all Dashers next month.