DoorDash is experimenting with a new app feature that would notify customers who leave no tip that it might take longer for their food to arrive. Dashers (DoorDash delivery drivers) can see how much a customer tipped before they accept the order, and they're more likely to choose orders with big tips over ones with no tip. The notification is aimed at informing customers of this downside to not tipping, possibly in the interest of being honest and open but primarily in the interest of incentivizing customers to include a tip.
This new notification about not tipping is just a test the company is doing to see if it produces the desired result. There's no guarantee that it will stay. But it is interesting to note that it's coming at a time when DoorDash has been facing legal troubles around its pay structure. New York passed a bill that mandates a minimum wage of $18 for gig work, and a judge recently denied DoorDash's attempt to overturn it.
As well as the tip notification, DoorDash has recently offered Dashers a fixed hourly rate instead of payment per order. Unfortunately, it hasn't been received well by the Dashers, who point out that the hourly rate doesn't account for time spent waiting for an order to come in. The clock starts when you accept the order and ends when it's delivered. It also creates the incentive to drag deliveries out for as long as possible, which could result in longer wait times.
DoorDash's Pay Structure
The history of tipping in America is fraught with controversy. It allows companies to underpay their workers, it obscures the true cost of goods and services from customers, and it's become so ubiquitous that we're even being asked to tip when shopping online. And while DoorDash's tip notification appears to be focused on helping their employees get paid, appearances can be deceiving.
The way DoorDash pays Dashers is so confusing that not even the Dashers know how much they're going to earn on any given day. That confusion obscures the fact that DoorDash is required to pay a guaranteed amount per order to the Dasher. If the customer tips, DoorDash pays as little as $1. That said, if the tip is greater than the base amount, the Dasher does earn that extra income. DoorDash is therefore incentivized to get the customer to tip something because otherwise, they are footing the bill.
DoorDash is at the front lines of the emerging gig economy. As such, it's still working through the kinks of how this system can work for everyone. They have to balance their budget to be profitable while also making sure their employees are getting paid a living wage. The gig economy is new, and the question is still open to some degree.
Read the original article on Tasting Table.