Facing a growing backlash over how it treats tips for delivery drivers, DoorDash’s CEO indicated on Twitter today that the company is looking to change its controversial wage structure.
In a tweet thread last night, DoorDash CEO and Co-Founder Tony Xu wrote:
After a year of research and conversations with thousands of Dashers, we 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. We thought we were doing the right thing by making Dashers whole when a customer left no tip. What we missed was that some customers who *did* tip would feel like their tip did not matter.
We did not launch our current model to pay Dashers less. In fact, when we moved to it, our average contribution to Dashers stayed the same.
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. We’ll have specific details in the coming days.
Customer obsession and getting 1% better everyday are core values at DoorDash. These beliefs have led us to improvements in the past and they serve as our guide for the future.
1/ After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible.
— Tony Xu (@t_xu) July 24, 2019
DoorDash had been facing a mountain of bad press over the past couple of months over the way it used tips left for its delivery drivers. Where a person placing the order might have thought that tips they left went straight to the Dasher’s pocket, they were, instead, being used by DoorDash to fill in pay gaps in order to ensure a guaranteed fee for the job. So it wasn’t extra for a job well done.
Xu’s thread was obviously light on details, but he must have seen things in DoorDash’s data that showed that keeping this odious policy was bad for business. Not helping was the fact that it came to light earlier this week that Uber is testing out a $25 a month subscription plan that includes free Uber Eats delivery. In the cutthroat battle for delivery dollars, continuing to mislead customers is a bad idea.
Here’s a tip for DoorDash and every delivery service: treat the people building your business fairly.