DoorDash revamps app ahead of minimum wage requirement expansion
DoorDash (DASH) is rolling out a new way for its delivery workers to earn money as a minimum wage deadline in New York City is set to kick in next month.
On the DoorDash app, delivery workers — which it calls Dashers — can now earn by time in addition to per offer, allowing workers to earn a guaranteed hourly minimum rate for the time spent on delivery plus 100% of tips. The guaranteed hourly rate is shown up front to workers before they accept an offer.
Cody Aughney, the company's head of Dasher logistics, said this new program is intended to provide "more consistency" for delivery workers. DoorDash's earn per offer, which pays delivery workers based on orders they accept, will remain in place.
These updates come as both national and local government agencies are cracking down on delivery companies.
Effective July 12, 2023, the NYC Department of Consumer and Worker Protection set a minimum pay rate for app-based restaurant delivery workers of at least $17.96 per hour, which is roughly $0.30 per minute, not including tips.
For apps that only pay for the time that the driver picks up and drops off the goods, the worker must earn at least approximately $0.50 per minute of trip time, not including tips.
Back in September 2022, the Federal Trade Commission said it would "use its full authority" to "protect these workers from unfair, deceptive, and anticompetitive practices."
A DoorDash spokesperson said the new feature was not created in response to "specific policies in specific cities or states" and will not be available in New York City, "nor in any market with earning standard legislations."
The spokesperson added the new feature "avoids the pitfalls of the NYC earnings standard and gets the balance right, it allows dashers the choice to earn a guaranteed hourly rate, without removing flexibility or harming dashers, consumers and merchants."
In its first quarter letter to shareholders, DoorDash wrote that delivering orders for the company "remains misunderstood and the subject of misinformation in some quarters, as many people struggle to assess the value of something that does not fit their existing notions."
"Regardless of one's perception of work, its purpose is to help people achieve certain financial goals and live fulfilling lives," the company added. "Dashing seems to help millions of people with this. We hope pundits and policymakers looking to shape future policies around work consider what Dashers say and do, the value of choice, and the goal of supporting individuals and families in achieving their goals."
Other updates announced Wednesday include a concept called Dash Along the Way, which lets delivery workers accept offers while they are en route to deliver to "maximize their earnings potential."
The company is also rolling out post-checkout tipping, which lets consumers add or increase a tip for up to 30 days after the delivery, and location sharing on the app with up to five contacts. DoorDash also announced it will begin the acceptance of SNAP/EBT online payments.
All of the changes will roll out throughout the US this year.
DoorDash's top competitor, Uber Eats (UBER), pays its delivery workers for every pickup and dropoff that is completed, in addition to a per-mile rate. In some cities, Uber Eats workers can also receive a per-minute rate.
Editor's note: This story was updated with additional comments from DoorDash.
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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