DoorDash Updates Tipping Policy

DoorDash Updates Tipping Policy

DoorDash Updates Tipping Policy banner

There are two sides to tipping. The person doing the tipping and the one being tipped. If you’re a struggling college student, like me, tipping might be something you do on a good day. According to Glassdoor, food-delivery drivers make an average of $10 an hour. At that rate, it is understandable that tips are an important part of their income. Also important, keeping these drivers happy: A 2019 State of the Industry report by The National Restaurant Association reports that 60 percent of all restaurateurs say that to-go-order sales are higher than two years ago.

Food-delivery apps like DoorDash have been beneficial to so many people—especially college students who are too tired to cook or too busy studying. But what are the benefits to drivers? Do they get tipped appropriately for their work? DoorDash is supposed to guarantee Dashers a base fee per delivery, but the catch is if they are tipped less than the base fee by the customer, DoorDash would add on to make the base. But if the tip is more than the fee, drivers do not receive any payments from the company. (No wonder some dashers snack on customer orders.) This tipping policy was in practice but not fully understood by many drivers and most customers until recently when the company started to receive public scrutiny for its tipping policies.

After weeks of silence and pressure from the public, DoorDash CEO Tony Xu recently announced in a blog post that the company has made some changes to its tipping policy. Dashers will now be paid a base fee in addition to whatever tips they may receive. DoorDash also added incentives for its drivers. Dashers can now earn extra money on each delivery through Peak Pay and Challenge Bonuses. This will better reward more active Dashers and help them meet specific earnings goals for the week.

In an interview, Johnson & Wales University College of Hospitality Management professor Paul Bagdan, Ph.D., who teaches at the Providence campus and online, said, ‘I applaud Tony Xu’s new policy. Tipping is a highly controversial policy; transparency will only help this successful business model move into the future. Whether or not customers agree with tipping is beside the point. Knowing that their tips go directly to the Dashers is vital.’

Learn more about earning your food service management bachelor’s degree online at JWU. Complete the “Request Info” form on this page or call 855-JWU-1881. Click here for information on our other degree programs.

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