First of all, thank you for taking DoorDash from a small delivery company into the giant it is today. Overall, I ave enjoyed this extra source of income.
Let me give some background information about myself. I started to Dash for DoorDash back in the Summer of 2015 (I am not too clear on the dates, as the app does not show my history, (wish list item) but I started right around the same time DoorDash opened up shop in Houston.)
I would rather remain anonymous to prevent any potential blacklash, but to verify my account, my orientation was in a townhome in Houston’s Freedmen’s Town, which I believe was located on Andrews street. DoorDash was so brand new that I thought maybe it was a scam. Kind of awkward walking into a townhome in a residential area for what was an orientation. Don’t get me wrong, every company has to start somewhere. The office personnel were very friendly and honest and I ended up dashing that same day. I remember them giving me a DoorDash shirt while making it clear that I was not an employee, and by no means am I required to wear that shirt. There was 2 guys there at the time. One served in one of my old units, and I believe he said the manager of Houston was a marine recon veteran. That’s awesome Tony. I have a special place for companies that hire veterans. Anyhow, I enjoyed it. At the time I was doing Uber, but ended up dashing more because the pay was pretty awesome and I got to put on a lot less miles compared to driving for Uber. As a independent contractor that means I have less expenses to worry about, so the pay becomes more. I remember during this time, DoorDash truly cared about Dashers. At one point, I was sitting in a zone that did not have much deliveries going on and to be honest, I was getting a little bored. I received a phone call while waiting for a order from a guy who claimed to work for DoorDash. He asked very politely if I would be willing to change zones as another one was getting hammered, mid dash and he wold be able to updated my account and offered a bonus. Considering this meant I only had to travel about 8 miles, I couldn’t complain. Truth is, I probably would of without him offering a bonus, because he asked nicely, and I was not getting any orders anyways.
As time went by, boost pay went away, additional pay was introduced and I felt like I was not getting enough orders to make it worthwhile. I get it. DoorDash is a for profit business and needs to make money at the end of the day, just like the rest of us while keeping waiting times low for customers. (more dashers = less orders for those on the road). I get that people don’t tip and I was thrilled to learn that DoorDash would top off earnings and give a guaranteed amount when we receive the ping and we can decide if it is worth it or not. However, what wasn’t cool was the fact that customers tips were going towards easing the cost to DoorDash. Not only does DoorDash charge customers fees directly, but it also takes a percentage of every order from restaurants. I have to admit, I am nosy and look at the order sheets that restaurants print out. I have seen “partner” restaurants charged between 20% and 45%. Non partners (the ones who may or may not know they are on the DoorDash app, and get orders placed via phone instead of tablets) are added to the app essentially, free of charge. (If you are a restaurant owner on the app reading this, you may want to skip becoming a partner to save on fees, you will still be left on the app.) Basically, DoorDash is getting paid enough either way. This whole tipped wage thing really started to turn me off to DoorDash.
Again, I get it. DoorDash needs to make money. But not at the cost of Dashers losing their hard earned tips. I have heard from dozens of drivers since you posted on Twitter your promise to walk back the tipped wages pay model. Many have expressed that they feel this means they will get paid less. It shouldn’t mean this, but this is how drivers feel and they are genuinely worried. Many claimed they made about the same with the new pay model as they did with the old pay model. While this maybe true, I am also going to draw a conclusion that DoorDash now has more customers than ever. Because of this, the average dasher’s income should of increased per block, not remain stagnate. How can you expect to retain dashers when they feel their hard work is not paying off? By using the tipped wages pay model, you are keeping drivers from earning more. At the same time, (I am sure your data can confirm) that there are some places that generate better and bigger tips than others. Fast food, generally does not produce tips (if they do, it may only be a couple bucks max, since tips in DoorDash are based on percentages and small orders even get an extra fee on DoorDash). This is when the tipped wages model makes sense. “Didn’t make it to $5? We will top you off.” I love that part of it.
Another reason why dashers are now afraid of the new pay model being walked back is that you will start to show less information on the acceptance screen, more specifically guaranteed amounts.
But remember, when I said fast food does not produce (enough) tips? I know I am not the only one who feels this way. One of the soon to biggest culprits will be McDonalds. On UberEats, you an expect a tip less than 10% of the time. With DoorDash, it will be no different. Common sense tells us that the average American, will not pay $10+DD_FEES+$5 tip. Sure these happen, but your data surely shows differently, which is why you felt you need to top off.
So, what happens when a Dasher gets a fast food meal that the bill won’t be $50? A simple ignore of the ping. These will eventually get picked up by a Dasher but the ones who have this figured out, are the ones you want handling the food, as they have likely done this more than a few times. Sure you can require a certain acceptance rate, but that also skates along the lines of employment. If DoorDash feels they can not afford to pay $5 for a delivery to Independent Contractors, there is no way you can afford to have us as employees.
On a side note: I would rather be a contractor but if DoorDash continues to drop rates, I would rather be an employee for that protection. I have long advocated to be a contractor with the Uber platform, but with rates so low, it only makes sense for us to become employees.
How do you prevent low acceptance rates?
I have a couple thoughts on how you can get dashers to pick up every dash, while keeping out of pocket expenses for DoorDash low. (remember, I am a dasher myself, so if these went into effect, I will accept 100% of dashes, (dependent on distance).
1) Set the base pay to $5 on every dash.
Most customers already pay in excess of $5 per delivery. If not, it should be set as $5 minimum across the board. This may not work with the DoorDash model, but that maybe an expense DoorDash has to eat. (pun intended)
2) Bring back hourly guarantees (with a min. acceptance rate). This used to be $9 an hour before tips here in Houston. We would often exceed this in delivery fees.
3) Keep the delivery distance to a small radius. For $5, I really do not want to exceed a 5 mile threshold. For every mile after, you can probably get away with .50 cents a mile in the form of additional pay as that is basically what UberEats pays. This can easily be charged from the customers as a long distance fee. If a restaurant is 10 miles away, as a customer, I wouldn’t mind paying $5 extra. Anything over 10 miles, and you really have to worry about temperature control and the quality of food (even with the red bags). Shorter delivery distances ensures better food control.
Now, I get that you want to be lower priced as your competitors but you don’t NEED to be. When I order as a customer, I usually choose DoorDash over UberEats. Why? Because I know that dasher is going to most likely have a insulated bag. UberEats does not require this bag (it is recommended). Dashers come to your door. UberEats couriers get “lost.” in an attempt to make you come to their car. Things like that will make your customers want to come back, even if they try the other companies.
As both a Dasher and UberEats driver, I can honestly say that, if DoorDash paid more more than UberEats, I will have no reason to log into UberEats. I am not the only driver who feels this way. On a bigger scale (if you get enough drivers to log out of UberEats) customers who order UberEats will have to wait longer and that will create a negative user experience. In turn, more customers will flock to DoorDash over UberEats. One of the greatest ways to do this is to go back to #2 – Hourly Guarantees.
I really hope you not only read this letter but also really take these points into advisement. In your e-mails you kept stating this is what dashers seem to like, but honestly, it is not what we like. If you start to tap into the driver groups on Facebook, you will notice a lot of them 1) new to dashing (gig apps are notorious for low retention rates) and this tipping wage income is all they know or 2) They are fearful of being paid even less what they are today. The latter, is indicative that if rates go any lower, a lot of dashers will not feel financially comfortable. Honestly it is quite sad dashers feel this way, you have to admit that much. What if MLK decided to not fight for Civil rights and instead decided to live a easier life by not standing up for what is right? He had all he needed. Why would he need more? This is the general consensus with dashers who would rather not fight the new pay model.
If the base rate continues to decline, this will lead to even lower retention rates. If you have used any ridesharing service over the years, surely you have noticed a decline in the quality of both drivers and cars. You can only go so low before you lose all the good ones that made DoorDash what it is today.