BUSINESS
07/24/2019 13:37 EDT

DoorDash To Change Tipping Model Following Backlash

A New York Times report detailed the company's practice of counting customer gratuity toward drivers' promised wages.

Smith Collection/Gado via Getty Images
Close-up of a smartphone displaying the Dasher app for food delivery service Doordash.

DoorDash, an on-demand delivery app, said it is changing a policy that effectively distributed customers’ tips to the company rather than to delivery drivers.

“Going forward, 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,” DoorDash chief executive Tony Xu wrote in a Twitter thread on Tuesday night. “We’ll have specific details in the coming days.”

The announcement comes after a New York Times article on Sunday that detailed a reporter’s experience working as a DoorDash driver and examined the company’s tipping policy. The practice was no secret, but the renewed attention prompted swift backlash on social media.

DoorDash ― which hires contract workers, called “Dashers,” to make food deliveries ― guarantees a certain base pay for a delivery. If a customer chose to tip under the old policy, that money went toward that base pay rather than adding to the wage the driver was already promised.

As tech writer Louise Matsakis wrote on Twitter after reading the Times article: “I don’t believe that a single person intends to give a tip to a multibillion dollar venture-backed startup. They are trying to tip the person who delivered their order.”

She added: “This deceptive model should be illegal.”

Xu said in his thread that DoorDash “built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible. ... But it’s clear from recent feedback that we didn’t strike the right balance.”

Instacart, a grocery delivery app, also stopped counting tips toward drivers’ base pay in February after receiving criticism over its policy.

In announcing the change, Instacart founder Apoorva Mehta called the practice “misguided.”

“We heard loud and clear the frustration when your compensation didn’t match the effort you put forth,” the executive said in an open letter to Instacart’s contracted workers. “As we looked at some of the extreme examples that have been surfaced by you over the last few days, it’s become clear to us that we can and should do better.” 

Following the Times article, Slate reporter April Glaser polled other major food delivery apps on their tipping policies. Postmates, Grubhub and its subsidiary Seamless, Caviar and Uber Eats all confirmed that tips to its workers are not used to subsidize their pay. Amazon told Glaser its grocery delivery and Prime Now workers “earn $18-25 per hour, including 100% of tips,” but the company did not say whether customers’ tips were counted toward base pay.