DoorDash changes tipping model after uproar from customers

DoorDash's tipping policy had effectively meant customers’ tips were going to DoorDash rather than the person who delivered their meal.

A food deliveryman navigates Herald Square in Midtown Manhattan, April 29, 2019.
A food deliveryman navigates Herald Square in Midtown Manhattan, April 29, 2019. –Christopher Lee/The New York TimesLEE

As DoorDash grew to become the biggest on-demand food delivery app in the country, it began doing something unconventional with customers’ tips: It used them mostly to subsidize its payments to delivery workers.

Even as it faced blistering criticism for the policy in February, DoorDash stuck with it.

No longer. DoorDash announced Tuesday night that it was dropping its tipping policy, which had effectively meant customers’ tips were going to DoorDash rather than the person who delivered their meal.

The decision followed another round of outrage and customer complaints about the policy after a New York Times reporter described in an article what it was like to work as a food-app deliveryman.

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“Going forward,” DoorDash’s chief executive, Tony Xu, wrote on Twitter on Tuesday, “we’re changing our model — the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days.”

For DoorDash’s 400,000 delivery workers, known as Dashers, the “specific details” hold the key to whether the decision actually increases the money that goes in their pockets.

Under the policy, which the company adopted in 2017, DoorDash began offering a guaranteed minimum payment for a delivery.

A tip paid through the app now went mostly to offsetting DoorDash’s contribution toward the guarantee, rather than increasing the Dasher’s pay.

DoorDash had said the system kept workers’ pay consistent when customers tipped little or nothing. For example, if DoorDash guaranteed a worker $7 for a delivery and a customer did not tip, DoorDash would directly pay the worker $7.

But if the customer tipped $3 via the app, DoorDash would directly pay the worker only $4, then add on the $3 tip so that the worker would still get only $7.