DoorDash said Wednesday that it would begin giving its drivers the option of being paid an hourly minimum wage, rather than earning money per delivery.
The significant change in compensation could be a response to concerns that some drivers are not being paid fairly. You could also add an incentive for drivers to pick up smaller orders that don’t pay as well and that they would normally avoid.
Drivers will be able to choose whether to earn money for each order, typically a few dollars in base pay plus compensation for miles driven, or to receive a flat amount per hour, DoorDash said.
The hourly rate includes only active time, that is, the time between the acceptance and delivery of an order, and does not include the period when drivers wait for the next order. Drivers will be able to toggle between the two payment methods. Tips would be applied in addition to base hourly pay, the company said.
DoorDash, which uses temporary workers to transport food and other deliveries, announced the change as part of Dash Forward, a product event marking DoorDash’s 10th anniversary.
DoorDash said it was adding the payment option in response to driver feedback and because it wanted to give drivers more say.
“One of the things we’ve heard a lot has to do with choice — the choice of when, where and how you win is really important,” said Cody Aughney, head of the company’s Dasher & Logistics team.
The relationship between temporary workers and companies like DoorDash and Uber has been scrutinized in recent years by regulators and labor activists. The biggest questions have been about how those workers are classified and whether they are paid adequately.
Concert conductors are often independent contractors who are responsible for their own expenses and do not receive benefits like full-time employees. They have long complained that companies underpay them and sometimes exploit them.
DoorDash said that drivers who chose to be paid by the hour and those who make money per delivery will likely earn a similar amount. The minimum compensation will depend on the region and will range from $10 to $19.50 per hour, the company said.
The new payment method is similar to Proposition 22, a 2020 California ballot measure that was endorsed by gig companies and guaranteed drivers minimum wage and limited other benefits in exchange for preventing them from being classified as employees.
But DoorDash said there was a big difference: Drivers can switch between hourly and delivery pay as often as they like. The new system will not be used in California, Seattle or New York, areas that have passed minimum wage laws for drivers.
Sergio Avedian, veteran pilot and collaborator of The carpool boya blog that provides advice to concert drivers, said that an hourly pay option “gives drivers a bit of a comfort zone.”
Avedian, who encourages drivers to turn down orders that aren’t likely to offer a decent day’s pay or a good tip, said paying by the hour could be a way for DoorDash to get them to accept smaller deliveries that they would have skipped.
“On their part, the point is to push as many orders as they can, and on the driver’s side, it can give them some security,” he said.
Because some drivers turn down less-desirable orders, DoorDash said, those who take everything on offer receive a disproportionate amount of those cheaper deliveries and find themselves at a disadvantage. The hourly minimum wage, the company said, will help that group.
