31 ms·

What DoorDash pays, after expenses, and what’s happening with tips

388 points by cbzbc 7y ago

bobloblaw45 7y ago
I drove for DoorDash for about a month. What killed me was the wait between deliveries. I think it was like 45 minutes on average and when I did get a delivery it was like a tiny $7 delivery. There would be 2 hour stretches of times pretty often. But then once in awhile I'd get a string of maybe 3 or 4 runs that paid like $12. over 2 or 3 hours.It was too inconsistent. Had no idea if I ever got tips, from my understanding I think the company pocketed it due to how they were paying at the time. The community talks about gaming the system and denying deliveries less than x dollars but I personally couldn't bring myself to do it. And after waiting an hour I'd be dying to get moving again anyway. This was before all the pay drama, it sounds like they've gotten much worse. There's just too many drivers I think.
- redis_mlc 7y ago
  What kind of vehicle did you use, and how did that affect your costs?
  - rdxm 7y ago
    do you think that would even remotely matter in a scenario where the effective comp rate is a buck 45???? machines wear out. the cost of even a oil change is typically 50-60 bucks. and don't even start with the electric thing which is decades away from broad applicability. see through the b.s. and understand when when people are getting played.
- mushufasa 7y ago
  >> There's just too many drivers I think. That's fascinating. Seems like the free market really would drive the wage to 0. DoorDash's "innovation" is the black box to obscure the fact. If they paid more fairly like their competitors, they wouldn't be growing as fast. Seems kindof like a cyberpunk future, with corporations negating regulations through advanced technology. Also in those cyberpunk futures, society breaks down into a lonely free-for-all, where the poor masses escape drudgery by playing with high-tech entertainment fantasies like games and VR and ... oh wait...
  - Vadoff 7y ago
    Hopefully universal income will kick in before that happens, as most of the dull work gets automated.
  - Consultant32452 7y ago
    Wages can't drop to zero unless there's an infinite supply of labor. As time has gone by fewer and fewer of the gig economy drivers I see speak English, and fewer of them are the person whose name/face is on the account, so I suspect the pseudo-infinite labor supply is working as intended.
    - cc439 7y ago
      There isn't infinite labor on a global scale but there sure is infinite labor willing to work for what first worlders consider a pittance. This basically highlights why I consider open borders immigration to be worse for everyone overall. The first world gets dragged down the societal ladder while the rest of the world is robbed of everyone with initiative plus the lost productivity they'd glean from uncompromised first world economies.
    - csmiller 7y ago
      I’ve always wondered what was going on when the driver didn’t match the person listed in the app. Doesn’t seem like there would be any benefit? (For me it’s often a male driver who is displayed as female in the app)
      - Consultant32452 7y ago
        It's categories like illegal immigrants, DUIs or otherwise lost drivers license, can't pass the background check, etc.
      - shiftpgdn 7y ago
        The person doing the actual driving is likely in the country illegaly or driving with a suspended license/no insurance.
- sansnomme 7y ago
  There is room for Uber-app-in-cloud-emulator multiplexers. As single app endpoint for a variety of delivery apps so you will have more options to choose from when business is slow.
  - darkwizard42 7y ago
    Wouldn't this require access to the companies APIs or scraping them somehow? I don't know that they allow for that.
  - chii 7y ago
    why does it need to be a single app emulator? Why can't the person just run all the apps on their phone in the first place?
- 9nGQluzmnq3M 7y ago
  Doordash may not be able to do much about that, since meal delivery demand is pretty spiky. As in any restaurant, there's a rush at lunch, another at dinner, and it's pretty quiet the rest of the time.
- devmunchies 7y ago
  >There's just too many drivers I think. interesting, I'm desperate for more drivers. I run a side business that delivers cookies, drivers do just under 30 deliveries a day (about 3-4 every hour) and make minimum wage plus 100% of tips are split at the end of pay period. it ends up being about $3/delivery in tips, which is an extra $9/hr for a total of $21/hr (minimum wage is $12). A driver could theoretically make over $50k/yr if they worked 6 days a week, but most choose not to (4-5 days a week). I've put a lot of work into the software to make it as efficient as possible so driver can get more orders and tips. My business: https://cravecookie.com/ https://cravecookie.com/
  - ec109685 7y ago
    6 days a week is a lot.
    - devmunchies 7y ago
      yup, it is. but if a driver needs the money... we don't ask or expect it.
  - oefrha 7y ago
    Unsolicited advice: maybe put the pricing next to or before the quick checkout section, or at least link to the pricing section before the quick checkout form? I’m not going to give you my address before I decide to enter a business relationship with you (which requires pricing info), and it was not at all clear to me pricing info is available before I go through the checkout process until I scrolled all the way to the bottom of the page just in case.
  - ISL 7y ago
    Is that $21/hr in revenue or $21/hr in profit for the driver? If the mileage cost is the $0.58/mi stated in the article, then the cost of driving ~15-30 miles in that hour is $9-17.
  - tallanvor 7y ago
    "plus 100% of tips are split at the end of pay period" Split with who?
- bigwavedave 7y ago
  The black box is one reason I always set my tip amount to $0 on the app and simply tip in cash when my food arrives.
- halfjoking 7y ago
  When I used Doordash I always saw they sent the delivery driver to the restaurant immediately. The driver would arrive 2 min after the order was placed. Didn't matter if it was at a nice restaurant that takes a long time to cook orders, they'd send the driver immediately and make them wait. Other services don't seem to have that problem. I'm not saying that's why wages and prices suck - because it's pretty much the same for all the apps. Every time I order from one of these apps I'm paying $40 for something I could have paid $20 at the restaurant. For the 10 min car ride that seems like everyone involved should be making a killing so I don't know how people aren't getting paid. If it wasn't 10 degrees outside or I had a car I'd just bike/drive the 3 miles myself. Unfortunately having a car where I live would mean I'd be paying $400 for parking, so might as well order $40 food delivery 10 times a month instead.
  - fapjacks 7y ago
    There are people making a killing, but in the traditional style, where the very small number of people at the top make a killing and everyone else does not.
dmode 7y ago
Why can’t we have normal businesses where you employ your workers and charge your customers the real cost of the transaction ? If that is not viable, don’t start the business to begin with. Let’s just go back to first principles, can we ?
- tempsy 7y ago
  That’s what Grubhub does
  - shanemlk 7y ago
    For 30% extra charged to the struggling small restaurant.
- arcticbull 7y ago
  I mean the idea is that you operate at a loss until the economies of scale catch up and you begin being profitable. Starting with the low price let’s you maximize growth, and you make it up on the back end. That’s not a problematic system. What is problematic is if there are no economies of scale.
  - CaptainZapp 7y ago
    Ahh, what you lose on every transaction you make up in volume. Got it!
    - arcticbull 7y ago
      What you lose on transactions today you make up on transactions in the future, when the volume reduces your cost basis to the point of profitability :)
      - baddox 7y ago
        It’s not clear how that would ever happen with last-mile delivery, unless we’re talking about something like drones or self-driving cars, and of course, those problems seem like they would be better solved by drone companies and self-driving car companies.
rdxm 7y ago
The "Gig Economy" will ultimately go down in history as one of the greatest frauds ever perpetrated on the broader public.
paxys 7y ago
An interesting nugget in this otherwise okay article is the suggestion that DoorDash is still indirectly keeping customer tips, because orders with low/zero tips are more likely to get rejected which means that they will have to keep increasing the base price till a driver accepts it. As a customer I suppose I should start adding tips only after the order is finished rather than when I place the order.
- OrgNet 7y ago
  Why would you tip before getting service anyways? that never made sense to me
  - dylz 7y ago
    Drivers would refuse to accept a low priced order, or one without tip, presumably.
    - JumpCrisscross 7y ago
      Then it isn’t a tip. It’s a fee.
      - kevingadd 7y ago
        Incidentally tips are like this for many regular non-gig-economy food service workers too - many areas allow an employer to pay less than the minimum wage as long as the total pay (including tips) meets the minimum. So a person who gets $0 in tips gets (say) 7.25/hr from their boss, but if they get 5/hr in tips they might just get 2.25/hr from the boss and not come out ahead at all - your tips are just a fee being handed indirectly to the boss. Of course, if they get more than 7.25/hr in tips they're coming out ahead, and there's still a minimum pay threshold so they're always getting something from the boss. According to a quick search federal standards in the US requires at least $2.13 per hour be paid to employees who receive at least $30/mo in tips, with the total needing to hit 7.25. It's probably higher in some areas. This is part of why wage theft is such a pervasive problem in the US because it's very easy to get away with it in scenarios where you're supposed to be compensating for variable tip income, etc - sometimes the boss just doesn't pay what they're supposed to, oops!
wrycoder 7y ago
I would guess that DoorDash is very negative for restaurants and restaurant waitstaff, also.
- cm2012 7y ago
  That doesn't make any sense. It's a choice for restaurants to sign up and they have like 10 services to choose from. If it's not good for the restaurants they'll just stop using it. Any marginal delivery is pure profit for a restaurant.
  - dylz 7y ago
    https://www.chicagotribune.com/business/ct-biz-doordash-restaurant-food-delivery-lawsuit-20180109-story.html https://www.chicagotribune.com/business/ct-biz-doordash-rest... https://support.google.com/business/thread/1857758?hl=en https://support.google.com/business/thread/1857758?hl=en
  - alasdair_ 7y ago
    There have been many cases of delivery app companies doing things like taking out ads in the company name with a phone number and website that looks like the restaurant but is actually the app company. So they feed off people organically searching and getting deliberately redirected.
  - chii 7y ago
    > If it's not good for the restaurants they'll just stop using it. it's not that it's not good, but that they noticed the delivery funnel is growing (and foot-traffic funnel correspondingly shrinking). This means if they don't participate, they risk losing this revenue stream to their competitors (who do participate). This is what happens when your business becomes a commodity to another business. You have to make sure your business has a value proposition that prevents it from becoming a commodity (or make sure you are very efficient at production and scale up to take advantage of your product becoming a commodity). Edit: i suspect things like massive, efficient industrial kitchens producing delivered food may become the new norm.
chrisseaton 7y ago
Why do they do these tips?! Why not charge a total and pay all expenses and people from that? I don't understand why the complicated setup and all the fuss that comes from it. Seems like they create problems for themselves out of nothing.
- zamfi 7y ago
  Also: why is the service fee separate from the delivery fee? Why do hotels charge an invisible “resort fee”? Why do airlines and utilities have so many extra fees you don’t find out about until later? These are all dark patterns that try to hide the actual cost. If doordash was upfront, saying “your total extra charge from doordash for delivering this to you is $25” instead of “$3.99 delivery; $12.57 service charge; $10 tip for driver” you might be more likely to realize how damn expensive the service is and pick up your own food.
  - lukeschlather 7y ago
    I'm not sure Doordash necessarily has that visibility. It seems like the restaurants build a service charge into their Doordash orders that isn't present if you go there and get a menu.
    - zamfi 7y ago
      I’m just talking about the stuff that shows up literally when I check out using doordash. doordash knows about them, obviously, because it’s showing them to me as line items. Hypothetical increased prices from the restaurant are a whole extra layer!
      - filmgirlcw 7y ago
        Oh, restaurants totally change prices based on eating in or delivery. Often, places will have different prices in different apps too — depending on what the costs are for them. I’ve literally played arbitrage between Seamless, DoorDash, Postmates, and a restaurant’s own website before to find the lowest price because the price was different everywhere. There are also places that won’t list in an app but will have delivery on their own website that is then sourced to DoorDash.
pithon 7y ago
I had DoorDash, using my account, deliver to my friend's place once. He now gets mail spam in my name at his house.
- xmprt 7y ago
  That's enough of a reason for me to never use DoorDash again.
cm2012 7y ago
This is an incredibly open market. If someone doesn't like DoorDash's payments, they can literally just install the Uber or Seamless or one of many other delivery apps and deliver that way. Since DoorDash is the market leader and does the most deliveries (according to the article), that leads me to believe most delivery folks would rather deliver with them, and not trust random articles like this.
- notwedtm 7y ago
  Everything about your argument is just wrong.
9nGQluzmnq3M 7y ago
Can't say I'm surprised -- having people in food delivery (read: waitstaff) work for virtually nothing and hoping to make it up in tips is entirely consistent with the American restaurant experience. Although at least restaurants are theoretically supposed to guarantee minimum wage, and don't exploit the car maintenance and depreciation of their workers.
- tempsy 7y ago
  A major negative consequence for restaurant workers as a result of food delivery apps is that they are busier than ever because they are now fulfilling orders all day from these apps in addition to orders from people that walk in. I went to Popeyes last week and there’s just a stream of receipts from online orders constantly printing, and they have to fulfill all those while dealing with everyone that comes in. And of course they aren’t getting paid any more to do maybe 3-4x the work they did before these apps got popular. In that world being paid per job seems better than making the same to do much more work.
  - seibelj 7y ago
    Aren’t minimum wage raises responsible for this? If restaurants are forced to pay $15 an hour minimum, how can it be profitable without them being more productive?
    - tempsy 7y ago
      No
    - chillwaves 7y ago
      It may surprise you to learn that most businesses employ minimal staffing no matter what the min. wage is. I worked for $5.25 an hour as a teenager, and that doesn't mean they just employed more people and we all took it easy. I would challenge the assertion that a business would not optimize worker output just because they are cheaper (and cheaper is relative, I'm sure even when it was lower the business owners still claimed it was too high). Lastly, there are many ways a business divides its costs and there are many ways to be successful, even if sharing more profits with workers. Just ask Costco.
mnm1 7y ago
This is exactly why we have labor laws, especially minimum wage laws. This company wouldn't exist if we had properly written laws that protected all workers, but they hide behind the excuse that people working for them are contractors blah blah... yeah we get it and it's time to close such idiotic loopholes. Contractor or not, at these rates, no one is independent. That's frankly ludicrous unless someone invented a way to clone people and make them into slaves. And the people working these sub minimum wage jobs to make a living deserve better. They deserve the minimum wage like everyone else, although I'm sure plenty of people here will argue that they deserve to starve and die of treatable diseases so they can make billionaires ever so slightly richer.
marcell 7y ago
> “These orders don’t pay for our expenses or our time. We actually lose money when we take those orders. If I pick up an order that is 10 miles away and deliver it 6 miles I’m traveling 16 miles for a $3 order — so I have lost money. I’m in the negative when I account for gas, wear and tear, and other expenses. Not to mention my time.” This begs an obvious question: why are people choosing to do this if it pays $0/hr? It’s voluntary. Can they find something better to do with their time?
- deleted 7y ago
  [deleted]
- chipperyman573 7y ago
  People don't realize it is a net negative and just think about the $3 they'll be getting
  - deleted 7y ago
    [deleted]
  - lotsofpulp 7y ago
    Maybe for a day or a week. How can they not realize when they have no money at the end of that?
    - chipperyman573 7y ago
      Because you don't get your car repaired every week
- benmanns 7y ago
  These jobs basically allow you to take a line of credit out against depreciation on your vehicle. Sure you lost money, but you get cash today.
  - xapata 7y ago
    Same with pizza delivery since forever.
cold_fact 7y ago
This is why when I do order from Doordash, I only tip in cash and make sure to write it in the comments. Still the best online delivery by me even if they are a shit company. Hate Grubhub more.
- noonespecial 7y ago
  I do also. As I hand them the cash I say very deliberately, "Thank you. This is for you, not them". I've been doing it for ubers lately as well.
  - millstone 7y ago
    Nice line, I'll borrow it. Also tip in cash, exclusively and well.
  - drmpeg 7y ago
    Same here. I like to say "Don't tell anybody".
- koolba 7y ago
  Do the delivery drivers see the message prior to accepting the gig? If so, can you add the actual price of the delivery as charged to you by DoorDash to the message so they can know how much they can game DoorDash?
  - pgrote 7y ago
    That is my question, too. After Doordash said they were giving 100% of the tips to the drivers, I started tipping high at the order thinking that the drivers were getting X for the delivery and then 100% of what I tipped. Based on this sample it appears I have been hoodwinked by Doordash and it irritates me. If I tip only cash, does my order sit and sit and sit?
    - ginknocab 7y ago
      It may sit for a while. We can't see notes before accepting it, unless you're willing to gamble on penalizing yourself with their 'Completion Rating' by accepting to read notes then 'reassigning' if there's no guarantee of higher pay. The 'Completion Rating' affects your ability to either schedule at 3pm, 6 days in advance or be a 'Top Dasher' that allows you to go on the clock any time you want. In smaller markets like mine, if I can't schedule at 3pm or be 'Top Dasher', I'm shit out of luck. I personally don't accept any offer below about $8 total. On average I see Doordash pay $3 'Base Pay.' I'm just not willing to gamble because there are a ton of people who are more than happy to not tip either out of ignorance or willfully being a cheap ass.
3fe9a03ccd14ca5 7y ago
> The company repeatedly defended this wildly unpopular tip-swiping pay model over several waves of public controversy The real controversy is why, in 2020 and only in the USA, do we have a business model that offloads the employee compensation responsibility onto customers?
CriticalCathed 7y ago
The other thing is that these services aren't even a good deal for the customers. I can order chinese from a local place by calling them and pay 30 instead of 20 w/ delivery, but with Doordash it ends up being almost double not including a tip. I'm not sure where the customers are coming from outside of drunks. It's not a good value.
- notwedtm 7y ago
  Because you're prioritizing for value. A lot of people prioritize for convenience.
Apocryphon 7y ago
So how do other food delivery companies avoid this? Isn’t it a commodified service?
burlesona 7y ago
What I struggle with is why anyone would deliver for Door Dash if the pay is so bad. The article closes with a statement that they want $15/hour plus expenses for drivers. The obvious problem is that I can’t see customers paying that much for delivery - ie. at those wages Door Dash can’t exist. The fact that people choose to do the work makes me think there are people who find it worthwhile, and I can explain a few scenarios that make a lot more sense than the ones in the article: I live in SF, which is only about 7mi by 7mi square, so if you do door dash here it’s very unlikely for a delivery to require more than 2-3 mi of travel. Further I see a lot of deliveries made on bikes, skateboards, scooters, etc. so the cost is much lower than the suburban deliveries made by car. I see a lot of young delivery people, who I imagine may be high school or college students who just want a few bucks spending money without any kind of time commitment, and maybe this works nicely for them. Regulating the wages to try and turn door dash into a “family feeding” job seems like it would do nothing but kill the business (and all the gig businesses), depriving people who want that kind of ultimate flexibility of the freedom and also depriving customers of a really convenient service. But I do think regulation could be very beneficial in creating transparency around payment to both the customer and the gig worker. I can see no reason the companies should be allowed to obscure what they pay their workers, where tips for, how many miles the worker traveled on a job etc. That kind of information is fair and reasonable to provide, and would help avoid gig companies exploiting people who unfortunately may not understand how to properly value their expenses. The final thing I would argue is that it’s reasonable to prohibit blind auctions, as door dash does. Instead of randomly pairing a person to a job, giving them only seconds to respond, and penalizing them (by not offering more) if they fail to respond, it would be much more fair to have a real-time auction map showing all deliveries that need to be picked up in a certain area, where they need to go, how much the pay is, and then letting them “sit on the map” and slowly tick up in price until a worker picks one. That’s a half-baked brainstorm so maybe that’s not the right implementation, but my point is simply: 1. I think regulating gig wages is a blunt instrument that would mostly end the gig companies and possibly entrench one or two mega corps as survivors that are still exploitive toward workers - whereas providing information transparency could potentially preserve the good things about gig jobs while eliminating the majority of bad outcomes for workers. 2. The real problem seems to be that there are so many people in need of “family feeding” jobs who are working for Door Dash etc. instead. When we talk about a “historically low unemployment rate,” things like this make it ring hollow to me. Clearly there are a lot of people unable to get better work, who as a result are really hurting economically, and we need to do a better job measuring and understanding that problem so we can respond more effectively to it.
notwedtm 7y ago
Wow, I don't think I've seen a comment quite this long on HN that failed 100% to provide anything substantive to the conversation. Kudos.
- TrackerFF 7y ago
  Companies that exploit workers by skirting around labor laws need to be regulated, do you really need more substance than that? It's not like this a one-off occurrence.
koolba 7y ago
Do DoorDash or if it’s competitors allow delivery drivers to set their own prices or max distances before receiving bids? For example, can you say in advance “Only accept $25+ jobs” or “Max distance 5 miles”?
loceng 7y ago
I think legislation is needed for 100% of "gig economy" platforms to in real-time state to the customer exactly how much the service provider is getting paid: how much if my Lyft driver getting - and what cut is Lyft taking, etc.
- JumpCrisscross 7y ago
  > in real-time state to the customer exactly how much the service provider is getting paid: how much if my Lyft driver getting - and what cut is Lyft taking, etc. What’s the benefit of real-time reporting? Just require disclosure on the receipt.
  - frandroid 7y ago
    That's basically real-time.
  - ninkendo 7y ago
    A charitable interpretation would have assumed that’s what they meant.
- TrackerFF 7y ago
  Consumers need to learn the real value of what's happening, and realize that low prices are not sustainable.
- Simon_says 7y ago
  Why should the customer care? The driver is the only one in a position to decide if it's a good deal.
  - bigwavedave 7y ago
    What do you mean, "why should the customer care"? If I'm being told that what I'm paying is a tip, I expect it to go to the server. I expect the administration fee to cover administration, I expect delivery to cover deliver, and I expect the tip to go to the driver, not to be taken by management whenever profits are down or their pricing model fails. But since companies can't be trusted to be honest with the consumer about what I'm paying for (even when spelled out with line items), I only ever tip cash when my food arrives.
sbr464 7y ago
I’ve heard from some restaurants that the main reason for not supporting delivery companies is the large # of chargebacks. I’d be curious to confirm.
TrackerFF 7y ago
If consumers aren't willing to pay more, then I truly hope this gigging economy goes down the drain. I live in a country with extremely strong labor laws, and for the past 3-4 years we've seen more and more of these gigging companies / startups try, and surprise surprise, they're fighting tooth and nail to get around labor laws - because that's where their edge and profitability lies. This is gonna sound harsh, but If you live in a country with abysmal labor laws, and you're getting exploited by companies like that...well, I don't particularly care. You need to get your laws and rights fixed, that's all I can say. But to bring this garbage here, that's where I personally draw a line.
ggm 7y ago
We're destroying society, one working norm at a time. This is ludicrous, and the lack of regulatory oversight of this kind of vampire game, which winds up ripping off the food source, and the delivery agent in some wierd game of capitalism is a huge black mark on our generations time. I cannot think of a reason to want to take work in the developed west, and casually turn it into this kind of serfdom. Every time I see gig economy workers in developing world economies, I think about this, and how immoral it is to uplift their drudgery and replace it into our context like there is no downside. Has anyone else here read "Down and out in Paris & London" which is Orwell's record of his time in the Paris restaurant business, and then as a tramp (bum) on the road between workhouses in the UK? This is what we're going back to. This is insane. We have to stop backing the gig economy.
- danans 7y ago
  > This is insane. We have to stop backing the gig economy Vote to regulate it in your state like CA has started to do. Individual behavior change won't change this system, but system wide regulatory signals can.
thelookingglass 7y ago
I wonder what that 12.6 billion market valuation will drop to after the crash
synaesthesisx 7y ago
This is why we need autonomous delivery services. Exploiting robots is acceptable, exploiting humans on the other hand isn't. I've seen a couple of these around in LA ( https://thespoon.tech/postmates-serve-robot-spotted-and-filmed-making-deliveries-in-la/ https://thespoon.tech/postmates-serve-robot-spotted-and-film... ) and can only hope they become mainstream in the very near future.
DraftDodger67 7y ago
It seems like the biggest problem that 'Mariah' at the top of the article faces is that she has too many children, no partner, and her car is too fuel inefficient. The best way to help people in her situation is to encourage family planning, marriage, and cheap electric vehicles.
- lobster45 7y ago
  Yes, this would be ideal, but what about the people who are already in this situation? Are they a lost cause?
  - DraftDodger67 7y ago
    The taxpayer is already picking up the tab with food stamps.
ipince 7y ago
It'd be interesting to do this analysis with other type of vehicles, like scooters or bikes. The mileage/depreciation is substantially lower, to the point where it might not be that bad of a pay (and if you're biking, you can get some exercise too).
- nbabitskiy 7y ago
  >> if you're biking, you can get some exercise too Moscow is now full of delivery guys on bikes, sometimes electric, at ~0°C. I wonder if delivery services advertise it as work benefits.
kangaroozach 7y ago
Sophisticated companies preying on unsophisticated small businesses (workers). This is the same garbage that convinced many businesses that selling Groupons was good for them when clearly it wasn’t. The same thing that gets drivers to exchange the equity in their vehicle for money while giving away their time for free. They optimize their business models and pricing to take the most advantage of an endless pool of desperate individuals just seeking to get by. Meanwhile well regarded VCs and celebs get rich before the entire model inevitably proves to be bogus. It’s a total scheme. But stealing tips is as low and unethical as it gets. By definition a tip is a direct payment to the service provider. Even pooling tips is not ethical. But literally stealing tips is false advertising. They are selling tips and delivering something else. Call it something else, but if you call it a tip and don’t pass 100% to the delivery person you are an unethical person. And this is coming from a free market capitalist.
bubblethink 7y ago
I recently discovered that doordash also jacks up the prices of items. $7 sandwich = 7 + 2 in markup + 2 in delivery/service fees + 2 in tip if you tip = 13. So you pay roughly twice the amount and everyone is unhappy at the end other than doordash. How is this business model still working in the US ?
jamisteven 7y ago
These "gig" and "service" companies are simply re-defining minimum wage and taking advantage of a segment of the populace that cant get minimum wage jobs for one reason or another. But yea, dont want 1.45 an hour then find another job. Dont want to be broke AF then dont have 3 kids. How can anyone take the examples in this article even remotely serious.
- TrackerFF 7y ago
  >> But yea, dont want 1.45 an hour then find another job. >> Dont want to be broke AF then dont have 3 kids. Life is pretty uncertain and dynamic, it's entirely possible to be a parent w/well paying job, until you don't have it anymore. Victim blaming is BS.
jariel 7y ago
This model simply isn't sustainable and only cash from gullible investors, perpetual scammy behaviour, and a never ending cycle of people trying to work for them for a while, especially while ignoring costs such as wear and tear on their car, and the fact they can skip all of those other things like health insurance, training etc. - keeps it afloat. It's time for these experiments to crash under the weight of the free market and basic regulation. This is not the American Dream, quite the opposite.
ajcodez 7y ago
I can see why they did it that way. Fixing the algorithm would require setting the base pay relative to delivery cost and then canceling orders that don’t tip enough to get accepted. Not exactly palatable for customers. ”Your order was not accepted by any drivers. Try again!”
whatitdobooboo 7y ago
Some valid points maybe but the article is a little misleading, bolding the $1.45 but then right after saying "after mileage and expenses." Not sure what a company like doordash can do in that case, are all doordash drivers driving fuel efficient cars? Also, what factors in is that many people cannot afford cars that are in good shape. Tips aspect is inexcusable, however.
hurricanetc 7y ago
This is supply and demand in action. From a strictly capitalist perspective DoorDash should continue to drop wages until people stop working for them. The equilibrium is obviously lower than their current payouts or people wouldn’t continue driving for them. I don’t think it is possible to make money in the gig economy driving a vehicle. These articles talk about direct car expenses but never talk about indirect. If you factor in vehicle depreciation I am convinced that the net wage for driving is below $0.
yspeak 7y ago
If you don't like it don't work for them. Why is that so difficult ? Don't overregulate.
walterkrankheit 7y ago
We have similar issues in Berlin with wildly exploited workers... the only thing that keeps it one step above here is that they are all bicycle driven, so fuel costs are not a factor.
d0100 7y ago
Why are people working for door dash with cars? This is the kind of job for motorcycles and bycicles (in denser cities)
darkmagnus 7y ago
People really need to learn to cook....
gerardnll 7y ago
Another one of those businesses that survive by worker slavery. Shameful, they all should go bankrupt. Also, tips in a lot of jobs in USA are now basic for a job to be sustainable, incredible. Maybe 'Tip' is no longer the appropriate word for that. How are they allowed to pay such a misery?
didibus 7y ago
I'm still confused why would people keep working for DoorDash? No other jobs around? Would they just be unemployed if DoorDash closed down? Is it that DoorDash actually tricks people into working for them with hope of a higher wage which never comes? I'm against the practices they put in place, but am more leaning on better universal income, health, basic amenities, things like that. And I'd hope that if that was the case, it would also mean no one works for DoorDash making 2$ an hour, since that's less then your universal benefits would even give you. But I'm not sold on any one idea. So I'm asking to help refine my opinion. I feel I'm missing a piece of the picture here.
nextlevelwizard 7y ago
This is pretty simple. If you make just enough for gas and can't feed your kids, you need to find another job. This is exactly the same out cry every restaurant server makes: "without tips I couldn't live! so you are responsible to tip if you eat out". When in reality they have to make enough to keep working, so that is just social pressure from them to bleed out money from rest of us. In no other job would we tolerate this kind of behavior. Why should we feel bad for these people?
fapjacks 7y ago
This rent-seeking behavior is amplified in its ridiculousness because of how expensive DoorDash is to begin with.
willart4food 7y ago
It's a race to the bottom, whoever charges less "wins".
wayanon 7y ago
Is there no payment in the US to parents from the Gov for parents? Eg in UK there is ‘child benefit’. An amount of money paid per child.
- lr4444lr 7y ago
  The Earned Income Tax Credit essentially does this, as does the general tax exemptions you can declare by having dependents.
  - ian0 7y ago
    Child benefit are payments remitted to parents regardless of working status not a tax credit
mabbo 7y ago
Is anyone else starting to get the feeling that "gig economy" is this generation's "multi-level marketing"? People who don't know any better get sold on the "be your own boss, earn what you put in" concept. Reality doesn't match expectations. The people work their asses off and wind up with a lot less money than they expected because costs and actual spent time aren't taken into account. The people they're working for continue to make lots of money. People quit, but are soon replaced by the next sucker. MLMs still exist and are going strong, but culturally we're more aware of what they are. But maybe we're becoming more aware of what "gigs" are. Perhaps, and I both love and hate myself for saying this, 'the gig is up'?
- LudwigNagasena 7y ago
  > "gig economy" is this generation's "multi-level marketing" >People who don't know any better get sold on the "be your own boss, earn what you put in" concept. I personally know no person who thinks driving Uber or delivering food is a job where you are “being your own boss”. It seems like these jobs are generally perceived as low-status low-paying jobs for people without education who have no better opportunities.
  - apacheCamel 7y ago
    I have many friends who have pretty average jobs who also do Uber/DD on the side. They just view it as a part time job that they can choose to do whenever they have extra time. I think it is a bit much to say it is for those without education or no other opportunities.
- matthewaveryusa 7y ago
  I always thought MLMs were a bit of a joke and no longer existed. In the social spheres I willfully interact with MLMs are always the butt of a joke. In my whole life I've never had a close or distant friend try to sell me something. Then my first child was born, and there's a great mixing of classes and social circles that happens. You no longer necessarily choose the adult friends you interact with. All of a sudden, the whatsapp chat we setup among parents to coordinate 'kids things' became yet another platform for these MLM moms to push their shit (the dads are too busy talking about sports and gambling.) It's really sad, desperate, and shows a complete lack of social awareness -- something I was never exposed to. I was once stumped in trying to figure out why people do things against their own interests, but the MLM moms gave me the answer: A lot of people lack the critical thinking, distancing and math I consider fundamental.
boh 7y ago
It's becoming abundantly clear the real innovation from on-demand services (including ride-sharing companies), is their ability to transfer more money from labor to capital with complex pay structures. For many if not most of these companies, its their only means towards profitability. For instance, any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers. Tech has long lost the glow that prevented the public from scrutinizing whether a VC subsidized, underdeveloped business model is good for society. So far the answer seems to be no.
- soared 7y ago
  > any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers Outrageous claim. Source?
  - boh 7y ago
    Uber's own P&L. An article regarding the P&L: https://www.nakedcapitalism.com/2017/12/can-uber-ever-deliver-part-eleven-annual-uber-losses-now-approaching-5-billion.html https://www.nakedcapitalism.com/2017/12/can-uber-ever-delive...
  - mlthoughts2018 7y ago
    It’s outrageous to say that is an outrageous claim at this point. To suggest Uber had other means of obtaining profitability would be the incredible claim needing tons of new evidence, not the other way around.
- scarface74 7y ago
  How could cutting drivers pay without cutting prices to increase demand raise revenue? It would raise profit possibly or in Uber’s case reduce losses.
  - Lavery 7y ago
    The cost to Uber users is not the same as revenue to Uber corporate. Uber corporate revenue is net of driver pay.
deleted 7y ago
[deleted]
why-oh-why 7y ago
It’s kind of surprising that anyone who works for these services for more than one day keeps working in these conditions. If you made $50 in one day and spent $40 in gas, why work again? Does Doordash pay more initially to “get them hooked?” It’s definitely predatory practices of people who don’t understand that, after a day of work, you should have more money than what you spent.
- save_ferris 7y ago
  In some cases, people value the flexibility. In other cases, there aren’t a lot of better options for people. > it’s definitely predatory practices of people who don’t understand that I find it hard to believe that after so many gig economy apps have been scrutinized over this, they simply don’t understand. Some of them have to understand, and just don’t care, because they’re trying to cash in on their equity.
squiggleblaz 7y ago
According to the article, the standard delivery fee is 5.99 and there's a 10% service charge. Surely the purchaser thinks "I'm paying 5.99 to the driver and 10% to DoorDash". It feels like theft. The company is telling the customer one thing, the driver another thing, and stealing the difference.
- arcticfox 7y ago
  That's plausible, although as a relatively naive user, I always thought the 5.99 + 10% was just how they decided to calculate the price to scale with the cost of the order. I never thought that the 5.99 was all for the driver. I might be in the minority though, it would be interesting to see how masses of people generally read that language.
- Spivak 7y ago
  I have never assumed that the "delivery" and "service" fees went straight to the driver. The "delivery fee" is the premium I pay to get my food delivered and the "service fee" is the premium I pay for using X service to place the order. Trying to assume anything about where each dollar goes once you pay is a little silly. Those line items are prices for services. I mean when you order Papa John's for example they tell you explicitly that the delivery fee isn't a tip for the driver. In some vague but not terribly meaningful way your delivery fee does pay for the driver's wage but so does the every other form of revenue.
  - squiggleblaz 7y ago
    Hi, that's not what I said. If I go to AirBNB, it has a cost of the rental and a service fee. I assume that the rental cost goes to the owner, and the service fee goes to AirBNB. And likewise, if there's a delivery fee and a separate service fee for a delivery, I would assume the delivery fee goes to the one who does the delivery and the service fee goes to the middle man. What's the point otherwise? Why not just merge them into one single fee?
    - Spivak 7y ago
      > Why not just merge them into one single fee? If you had to add "delivery: $5.99" and "process order through FoodApp: $1.99" to your cart would it make more sense? They're services your purchasing. Do you expect the money for the pizza goes to the chef? > I assume that the rental cost goes to the owner, and the service fee goes to AirBNB. Why? Hostels.ru negotiates a rate with hotel chains and then charges you as much as they think they can get away with. No reason to think they're related.
uptown 7y ago
Almost none of these DoorDash / Uber / Lyft drivers are doing the math with consideration of the wear-and-tear on their vehicles, nor the increased likelihood of accidents given they're out on the road more than they otherwise would have been. These are net negative "jobs".
- doctorOb 7y ago
  A job in the hand is worth two in the bush. The friends I've had who drove for DoorDash and/or Lyft were in between proper jobs (e.g CVS and reception at a hospital or something), and that in between period was lasting longer than they had the savings for.
mattmaroon 7y ago
Door Dash is so fucking shady. I ordered something from a local restaurant there. When the food was 45 minutes late, I drove there. Turns out the restaurant had never even heard of Door Dash.
thomk 7y ago
Yeah, fck DoorDash. DoorDash is the worst of all of these types of gig services. They are expensive, late, forget to grab items from the restaurant and they are not careful with food. After a few times using them (and getting a different delivery person every time) a chilling thought occurred to me. There is nothing preventing a driver from either eating part of your food or tampering with it. Think about that. A total stranger is completely alone* with your food with zero oversight. Once I was at a Starbucks when I saw the strangest thing. Some dude rushes in with a carryout bag and sat at the nearest table. He opened the bag, opened one (of many) styrofoam containers and hurriedly ate only part of one meal. Then he packaged it all back up and drove away without buying anything from Starbucks. At least in a restaurant you are dealing with employees and people are everywhere. DoorDashers work for a massive faceless corporation who has been shitty about pay and tips. Why wouldn't they grab a bite or two?
- anthonypasq 7y ago
  luckily I would know if someone ate some of my pizza
- hmschreck 7y ago
  The final time I ordered from DoorDash, the driver ignored directions (which no one else had ever had issues with), didn't tell me there was something wrong with the directions I had sent him 10 minutes in until over half an hour after leaving the restaurant (my apartment is a 7 minute drive in normal traffic), and I had to call him to get him to tell me that much. He refused to listen to the directions, and when the address that I live at didn't work for him, demanded a different address. DoorDash support then demanded the same, but I told them I was not allowing an obviously irate man to come to my apartment. It took me 20 minutes to get them to assign a new driver so I could give my address. I am never dealing with them again.
e_tm_ 7y ago
Tip in cash.
rutherf0rd 7y ago
Although the claims seem reasonable, the dataset is fairy small, 200 data points. It would be great if they continued to build the data, and even better if they opened it up.
Balanceinfinity 7y ago
It's a free country - the drivers can choose to take the assignments or choose not to. What they (and customers) are entitled to are accurate information so they can make choices about whether this is in their interest. It's easy to say "Door dash should pay more," (and they probably should), but that might cut customer usage by 40%, which means half of the people driving wouldn't be able to drive. The one thing that Door Dash shouldn't be able to do is duck payroll taxes, so that these people have social security benefits.
- gadabout 7y ago
  Curious, where does 40% come from?
  - Balanceinfinity 7y ago
    hypothetical number - chosen for the sake of argument
makecheck 7y ago
As we get closer and closer to “no need for cash”, I find with food delivery I always want cash around for tips because it is the only way to know for sure what happens with the money. I shouldn’t have to do that.
no_flags 7y ago
I don't think using the IRS mileage number is an accurate way to calculate costs of operating a vehicle for a couple reasons. Consider this report from AAA: https://exchange.aaa.com/automotive/driving-costs/ https://exchange.aaa.com/automotive/driving-costs/ Notice that the cost per mile actually goes down the more miles you drive! You have to drive 20,000 miles to get down the ballpark of the IRS number. This indicates that expenses affected by mileage like gas, maintenance, and depreciation are dominated by up front costs like insurance and taxes. Now consider that most door dash drivers already chose to have a car before working for door dash, so they will have to pay the up front costs regardless. For this reason, I don't think $0.58 per mile is a good estimate of the marginal cost associated with extra driving for door dash. The AAA report estimates gas and maintenance costs per mile at $0.17 to $0.23 depending on the type of car. Second, I don't believe it is right to include depreciation in a household budget because it does not manifest as an additional cost on top of the price of the car. Unless the car is listed as a line item on your household budget, you don't have to account for any additional loss in value. Imagine that you bought a car in cash for $1000 and never drive it. You lose the $1000 immediately. If some years later the car is worth $0, your total cost of ownership is still just $1000, not $2000. I believe the fact that people still chose to work for door dash is additional evidence that the estimated costs in this article are too high. We may not be perfect rational actors, but most of us can tell if our bank account is going up or down. None of this excuses the unethical behavior of door dash, and personally I choose not to use them. I believe tips are intended as a gift to the driver, so it is misleading to call it a tip if the driver isn't getting it. That said, I didn't find this analysis convincing for the reasons above.
coryfklein 7y ago
Tipping is an outdated social concept that needs eliminating. If my Costco cashier is a dick to me, I report that to his manager and he gets disciplined. If my Costco cashier is super slow, his manager notices and he improves or gets fired. Now why does this whole incentive/reward model get flipped on its head when this person is delivering food to my table (or door)? If my DoorDash driver takes a long time, I have NO IDEA whether that's because traffic was bad, there was snow on the road, the restaurant was busy, etc. What is even the purpose of the tip? I'm more and more convinced, especially after doing a 7-day cruise last week, that tips are kept in place by the establishment merely as a way to lower perceived prices. DoorDash wants to charge you $25 for something, but advertise that it only costs $20. DoorDash is in a much better place than I to detect patterns of performance in their employees, as are restaurant managers, haircut salons, the list goes on. In the end, the world would be a better place without tips. Those most capable of monitoring service quality would be stuck with that responsibility, prices would be communicated transparently, and, above all, total prices wouldn't even change anyway!
ZainRiz 7y ago
> Our analysis of more than two hundred samples of pay data provided by DoorDash workers across the country finds that DoorDash pays the average worker an astonishingly low $1.45/hour Key words being "provided by Doordash workers". Meaning at all of this "analysis" is based on the numbers being given by the most disgruntled workers who presumably make the least. This makes all their conclusions highly suspect. And if these disgruntled employees are aware that they're getting such a raw deal from Doordash, I'm wondering what stops them from going to a different company like Uber or Lyft instead. Those reportedly let people earn about $25 per hour (before expenses I think).
fulldecent2 7y ago
How can companies be incentivized to WANT to hire employees rather than having contractors be the default choice?
fulldecent2 7y ago
Regarding IRS Standard Mileage Rates. There are different costs to insure a vehicle based on whether it is "personal" use or "business" use. The IRS rate does not distinguish these. Is there any documentation on which scenario IRS is assuming this applies to?
- beatgammit 7y ago
  I don't know, but I ran my own numbers for my car and ended up with $0.25/mile. I counted: - insurance cost of second car (liability only) - depreciation - gas - maintenance and estimated repairs This was for my car, which was ~5 years old when I got it and is very fuel efficient. I found that depreciation makes up more than half of the total cost, so a newer car would likely have more depreciation than an older car. I got mine for $10k, and in 5 years, it's worth $5k. I think that's pretty common, regardless of the age of the car, so a ~$20k car would depreciate to ~$10k in 5 years. Also, newer cars are more expensive to insure, and taking a car to a shop is more expensive than doing it yourself. So $0.50 sounds reasonable for the average, relatively new car that is taken to the shop for maintenance and repairs.
- beatgammit 7y ago
  I don't know, but I ran my own numbers for my car and ended up with $0.25/mile. I counted: - insurance cost of second car (liability only) - depreciation - gas - maintenance and estimated repairs This was for my car, which was ~5 years old when I got it and is very fuel efficient. I found that depreciation makes up more than half of the total cost, so a newer car would likely have more depreciation than an older car. I got mine for $10k, and in 5 years, it's worth $5k. I think that's pretty common, regardless of the age of the car, so a ~$20k car would depreciate to ~$10k in 5 years. Also, newer cars are more expensive to insure, and taking a car to a shop is more expensive than doing it yourself. So $0.50/mile sounds reasonable for the average, relatively new car that is taken to the shop for maintenance and repairs. Insurance was a pretty small item in my calculations, so I doubt the difference between corporate and personal insurance would change the figure that much.
Data_Junkie 7y ago
Another system of mass stupidity. Our "leaders" should be absolutely ashamed of this disgusting "advancement" they have allowed to perpetuate uncontrolled. It's pathetic, and everyone knows it. Yet once again nothing will happen to improve things, they will "tweak" the algorithm and call it a day.
birdyrooster 7y ago
I recently ordered food from a Bay Area Mexican restaurant. I was floored by the $63 total from Door Dash, so I decided to pick up the order myself. Upon arriving to the restaurant, the price came to $60. I found that the prices at their restaurant were higher than the DoorDash menu prices by about 15%. This means that the restaurant is forgoing 15% for their food just to be affordable enough to get orders.

388 points by cbzbc 7y ago

I drove for DoorDash for about a month. What killed me was the wait between deliveries. I think it was like 45 minutes on average and when I did get a delivery it was like a tiny $7 delivery. There would be 2 hour stretches of times pretty often. But then once in awhile I'd get a string of maybe 3 or 4 runs that paid like $12. over 2 or 3 hours.It was too inconsistent. Had no idea if I ever got tips, from my understanding I think the company pocketed it due to how they were paying at the time. The community talks about gaming the system and denying deliveries less than x dollars but I personally couldn't bring myself to do it. And after waiting an hour I'd be dying to get moving again anyway. This was before all the pay drama, it sounds like they've gotten much worse. There's just too many drivers I think.

redis_mlc 7y ago
What kind of vehicle did you use, and how did that affect your costs?
- rdxm 7y ago
  do you think that would even remotely matter in a scenario where the effective comp rate is a buck 45???? machines wear out. the cost of even a oil change is typically 50-60 bucks. and don't even start with the electric thing which is decades away from broad applicability. see through the b.s. and understand when when people are getting played.
mushufasa 7y ago
>> There's just too many drivers I think. That's fascinating. Seems like the free market really would drive the wage to 0. DoorDash's "innovation" is the black box to obscure the fact. If they paid more fairly like their competitors, they wouldn't be growing as fast. Seems kindof like a cyberpunk future, with corporations negating regulations through advanced technology. Also in those cyberpunk futures, society breaks down into a lonely free-for-all, where the poor masses escape drudgery by playing with high-tech entertainment fantasies like games and VR and ... oh wait...
- Vadoff 7y ago
  Hopefully universal income will kick in before that happens, as most of the dull work gets automated.
- Consultant32452 7y ago
  Wages can't drop to zero unless there's an infinite supply of labor. As time has gone by fewer and fewer of the gig economy drivers I see speak English, and fewer of them are the person whose name/face is on the account, so I suspect the pseudo-infinite labor supply is working as intended.
  - cc439 7y ago
    There isn't infinite labor on a global scale but there sure is infinite labor willing to work for what first worlders consider a pittance. This basically highlights why I consider open borders immigration to be worse for everyone overall. The first world gets dragged down the societal ladder while the rest of the world is robbed of everyone with initiative plus the lost productivity they'd glean from uncompromised first world economies.
  - csmiller 7y ago
    I’ve always wondered what was going on when the driver didn’t match the person listed in the app. Doesn’t seem like there would be any benefit? (For me it’s often a male driver who is displayed as female in the app)
    - Consultant32452 7y ago
      It's categories like illegal immigrants, DUIs or otherwise lost drivers license, can't pass the background check, etc.
    - shiftpgdn 7y ago
      The person doing the actual driving is likely in the country illegaly or driving with a suspended license/no insurance.
sansnomme 7y ago
There is room for Uber-app-in-cloud-emulator multiplexers. As single app endpoint for a variety of delivery apps so you will have more options to choose from when business is slow.
- darkwizard42 7y ago
  Wouldn't this require access to the companies APIs or scraping them somehow? I don't know that they allow for that.
- chii 7y ago
  why does it need to be a single app emulator? Why can't the person just run all the apps on their phone in the first place?
9nGQluzmnq3M 7y ago
Doordash may not be able to do much about that, since meal delivery demand is pretty spiky. As in any restaurant, there's a rush at lunch, another at dinner, and it's pretty quiet the rest of the time.
devmunchies 7y ago
>There's just too many drivers I think. interesting, I'm desperate for more drivers. I run a side business that delivers cookies, drivers do just under 30 deliveries a day (about 3-4 every hour) and make minimum wage plus 100% of tips are split at the end of pay period. it ends up being about $3/delivery in tips, which is an extra $9/hr for a total of $21/hr (minimum wage is $12). A driver could theoretically make over $50k/yr if they worked 6 days a week, but most choose not to (4-5 days a week). I've put a lot of work into the software to make it as efficient as possible so driver can get more orders and tips. My business: https://cravecookie.com/ https://cravecookie.com/
- ec109685 7y ago
  6 days a week is a lot.
  - devmunchies 7y ago
    yup, it is. but if a driver needs the money... we don't ask or expect it.
- oefrha 7y ago
  Unsolicited advice: maybe put the pricing next to or before the quick checkout section, or at least link to the pricing section before the quick checkout form? I’m not going to give you my address before I decide to enter a business relationship with you (which requires pricing info), and it was not at all clear to me pricing info is available before I go through the checkout process until I scrolled all the way to the bottom of the page just in case.
- ISL 7y ago
  Is that $21/hr in revenue or $21/hr in profit for the driver? If the mileage cost is the $0.58/mi stated in the article, then the cost of driving ~15-30 miles in that hour is $9-17.
- tallanvor 7y ago
  "plus 100% of tips are split at the end of pay period" Split with who?
bigwavedave 7y ago
The black box is one reason I always set my tip amount to $0 on the app and simply tip in cash when my food arrives.
halfjoking 7y ago
When I used Doordash I always saw they sent the delivery driver to the restaurant immediately. The driver would arrive 2 min after the order was placed. Didn't matter if it was at a nice restaurant that takes a long time to cook orders, they'd send the driver immediately and make them wait. Other services don't seem to have that problem. I'm not saying that's why wages and prices suck - because it's pretty much the same for all the apps. Every time I order from one of these apps I'm paying $40 for something I could have paid $20 at the restaurant. For the 10 min car ride that seems like everyone involved should be making a killing so I don't know how people aren't getting paid. If it wasn't 10 degrees outside or I had a car I'd just bike/drive the 3 miles myself. Unfortunately having a car where I live would mean I'd be paying $400 for parking, so might as well order $40 food delivery 10 times a month instead.
- fapjacks 7y ago
  There are people making a killing, but in the traditional style, where the very small number of people at the top make a killing and everyone else does not.

dmode 7y ago

Why can’t we have normal businesses where you employ your workers and charge your customers the real cost of the transaction ? If that is not viable, don’t start the business to begin with. Let’s just go back to first principles, can we ?

tempsy 7y ago
That’s what Grubhub does
- shanemlk 7y ago
  For 30% extra charged to the struggling small restaurant.
arcticbull 7y ago
I mean the idea is that you operate at a loss until the economies of scale catch up and you begin being profitable. Starting with the low price let’s you maximize growth, and you make it up on the back end. That’s not a problematic system. What is problematic is if there are no economies of scale.
- CaptainZapp 7y ago
  Ahh, what you lose on every transaction you make up in volume. Got it!
  - arcticbull 7y ago
    What you lose on transactions today you make up on transactions in the future, when the volume reduces your cost basis to the point of profitability :)
    - baddox 7y ago
      It’s not clear how that would ever happen with last-mile delivery, unless we’re talking about something like drones or self-driving cars, and of course, those problems seem like they would be better solved by drone companies and self-driving car companies.

rdxm 7y ago

The "Gig Economy" will ultimately go down in history as one of the greatest frauds ever perpetrated on the broader public.

paxys 7y ago

An interesting nugget in this otherwise okay article is the suggestion that DoorDash is still indirectly keeping customer tips, because orders with low/zero tips are more likely to get rejected which means that they will have to keep increasing the base price till a driver accepts it. As a customer I suppose I should start adding tips only after the order is finished rather than when I place the order.

OrgNet 7y ago
Why would you tip before getting service anyways? that never made sense to me
- dylz 7y ago
  Drivers would refuse to accept a low priced order, or one without tip, presumably.
  - JumpCrisscross 7y ago
    Then it isn’t a tip. It’s a fee.
    - kevingadd 7y ago
      Incidentally tips are like this for many regular non-gig-economy food service workers too - many areas allow an employer to pay less than the minimum wage as long as the total pay (including tips) meets the minimum. So a person who gets $0 in tips gets (say) 7.25/hr from their boss, but if they get 5/hr in tips they might just get 2.25/hr from the boss and not come out ahead at all - your tips are just a fee being handed indirectly to the boss. Of course, if they get more than 7.25/hr in tips they're coming out ahead, and there's still a minimum pay threshold so they're always getting something from the boss. According to a quick search federal standards in the US requires at least $2.13 per hour be paid to employees who receive at least $30/mo in tips, with the total needing to hit 7.25. It's probably higher in some areas. This is part of why wage theft is such a pervasive problem in the US because it's very easy to get away with it in scenarios where you're supposed to be compensating for variable tip income, etc - sometimes the boss just doesn't pay what they're supposed to, oops!

wrycoder 7y ago

I would guess that DoorDash is very negative for restaurants and restaurant waitstaff, also.

cm2012 7y ago
That doesn't make any sense. It's a choice for restaurants to sign up and they have like 10 services to choose from. If it's not good for the restaurants they'll just stop using it. Any marginal delivery is pure profit for a restaurant.
- dylz 7y ago
  https://www.chicagotribune.com/business/ct-biz-doordash-restaurant-food-delivery-lawsuit-20180109-story.html https://www.chicagotribune.com/business/ct-biz-doordash-rest... https://support.google.com/business/thread/1857758?hl=en https://support.google.com/business/thread/1857758?hl=en
- alasdair_ 7y ago
  There have been many cases of delivery app companies doing things like taking out ads in the company name with a phone number and website that looks like the restaurant but is actually the app company. So they feed off people organically searching and getting deliberately redirected.
- chii 7y ago
  > If it's not good for the restaurants they'll just stop using it. it's not that it's not good, but that they noticed the delivery funnel is growing (and foot-traffic funnel correspondingly shrinking). This means if they don't participate, they risk losing this revenue stream to their competitors (who do participate). This is what happens when your business becomes a commodity to another business. You have to make sure your business has a value proposition that prevents it from becoming a commodity (or make sure you are very efficient at production and scale up to take advantage of your product becoming a commodity). Edit: i suspect things like massive, efficient industrial kitchens producing delivered food may become the new norm.

chrisseaton 7y ago

Why do they do these tips?! Why not charge a total and pay all expenses and people from that? I don't understand why the complicated setup and all the fuss that comes from it. Seems like they create problems for themselves out of nothing.

zamfi 7y ago
Also: why is the service fee separate from the delivery fee? Why do hotels charge an invisible “resort fee”? Why do airlines and utilities have so many extra fees you don’t find out about until later? These are all dark patterns that try to hide the actual cost. If doordash was upfront, saying “your total extra charge from doordash for delivering this to you is $25” instead of “$3.99 delivery; $12.57 service charge; $10 tip for driver” you might be more likely to realize how damn expensive the service is and pick up your own food.
- lukeschlather 7y ago
  I'm not sure Doordash necessarily has that visibility. It seems like the restaurants build a service charge into their Doordash orders that isn't present if you go there and get a menu.
  - zamfi 7y ago
    I’m just talking about the stuff that shows up literally when I check out using doordash. doordash knows about them, obviously, because it’s showing them to me as line items. Hypothetical increased prices from the restaurant are a whole extra layer!
    - filmgirlcw 7y ago
      Oh, restaurants totally change prices based on eating in or delivery. Often, places will have different prices in different apps too — depending on what the costs are for them. I’ve literally played arbitrage between Seamless, DoorDash, Postmates, and a restaurant’s own website before to find the lowest price because the price was different everywhere. There are also places that won’t list in an app but will have delivery on their own website that is then sourced to DoorDash.

pithon 7y ago

I had DoorDash, using my account, deliver to my friend's place once. He now gets mail spam in my name at his house.

xmprt 7y ago
That's enough of a reason for me to never use DoorDash again.

cm2012 7y ago

This is an incredibly open market. If someone doesn't like DoorDash's payments, they can literally just install the Uber or Seamless or one of many other delivery apps and deliver that way. Since DoorDash is the market leader and does the most deliveries (according to the article), that leads me to believe most delivery folks would rather deliver with them, and not trust random articles like this.

notwedtm 7y ago
Everything about your argument is just wrong.

9nGQluzmnq3M 7y ago

Can't say I'm surprised -- having people in food delivery (read: waitstaff) work for virtually nothing and hoping to make it up in tips is entirely consistent with the American restaurant experience. Although at least restaurants are theoretically supposed to guarantee minimum wage, and don't exploit the car maintenance and depreciation of their workers.

tempsy 7y ago
A major negative consequence for restaurant workers as a result of food delivery apps is that they are busier than ever because they are now fulfilling orders all day from these apps in addition to orders from people that walk in. I went to Popeyes last week and there’s just a stream of receipts from online orders constantly printing, and they have to fulfill all those while dealing with everyone that comes in. And of course they aren’t getting paid any more to do maybe 3-4x the work they did before these apps got popular. In that world being paid per job seems better than making the same to do much more work.
- seibelj 7y ago
  Aren’t minimum wage raises responsible for this? If restaurants are forced to pay $15 an hour minimum, how can it be profitable without them being more productive?
  - tempsy 7y ago
    No
  - chillwaves 7y ago
    It may surprise you to learn that most businesses employ minimal staffing no matter what the min. wage is. I worked for $5.25 an hour as a teenager, and that doesn't mean they just employed more people and we all took it easy. I would challenge the assertion that a business would not optimize worker output just because they are cheaper (and cheaper is relative, I'm sure even when it was lower the business owners still claimed it was too high). Lastly, there are many ways a business divides its costs and there are many ways to be successful, even if sharing more profits with workers. Just ask Costco.

mnm1 7y ago

This is exactly why we have labor laws, especially minimum wage laws. This company wouldn't exist if we had properly written laws that protected all workers, but they hide behind the excuse that people working for them are contractors blah blah... yeah we get it and it's time to close such idiotic loopholes. Contractor or not, at these rates, no one is independent. That's frankly ludicrous unless someone invented a way to clone people and make them into slaves. And the people working these sub minimum wage jobs to make a living deserve better. They deserve the minimum wage like everyone else, although I'm sure plenty of people here will argue that they deserve to starve and die of treatable diseases so they can make billionaires ever so slightly richer.

marcell 7y ago

> “These orders don’t pay for our expenses or our time. We actually lose money when we take those orders. If I pick up an order that is 10 miles away and deliver it 6 miles I’m traveling 16 miles for a $3 order — so I have lost money. I’m in the negative when I account for gas, wear and tear, and other expenses. Not to mention my time.” This begs an obvious question: why are people choosing to do this if it pays $0/hr? It’s voluntary. Can they find something better to do with their time?

deleted 7y ago
[deleted]
chipperyman573 7y ago
People don't realize it is a net negative and just think about the $3 they'll be getting
- deleted 7y ago
  [deleted]
- lotsofpulp 7y ago
  Maybe for a day or a week. How can they not realize when they have no money at the end of that?
  - chipperyman573 7y ago
    Because you don't get your car repaired every week
benmanns 7y ago
These jobs basically allow you to take a line of credit out against depreciation on your vehicle. Sure you lost money, but you get cash today.
- xapata 7y ago
  Same with pizza delivery since forever.

cold_fact 7y ago

This is why when I do order from Doordash, I only tip in cash and make sure to write it in the comments. Still the best online delivery by me even if they are a shit company. Hate Grubhub more.

noonespecial 7y ago
I do also. As I hand them the cash I say very deliberately, "Thank you. This is for you, not them". I've been doing it for ubers lately as well.
- millstone 7y ago
  Nice line, I'll borrow it. Also tip in cash, exclusively and well.
- drmpeg 7y ago
  Same here. I like to say "Don't tell anybody".
koolba 7y ago
Do the delivery drivers see the message prior to accepting the gig? If so, can you add the actual price of the delivery as charged to you by DoorDash to the message so they can know how much they can game DoorDash?
- pgrote 7y ago
  That is my question, too. After Doordash said they were giving 100% of the tips to the drivers, I started tipping high at the order thinking that the drivers were getting X for the delivery and then 100% of what I tipped. Based on this sample it appears I have been hoodwinked by Doordash and it irritates me. If I tip only cash, does my order sit and sit and sit?
  - ginknocab 7y ago
    It may sit for a while. We can't see notes before accepting it, unless you're willing to gamble on penalizing yourself with their 'Completion Rating' by accepting to read notes then 'reassigning' if there's no guarantee of higher pay. The 'Completion Rating' affects your ability to either schedule at 3pm, 6 days in advance or be a 'Top Dasher' that allows you to go on the clock any time you want. In smaller markets like mine, if I can't schedule at 3pm or be 'Top Dasher', I'm shit out of luck. I personally don't accept any offer below about $8 total. On average I see Doordash pay $3 'Base Pay.' I'm just not willing to gamble because there are a ton of people who are more than happy to not tip either out of ignorance or willfully being a cheap ass.

3fe9a03ccd14ca5 7y ago

> The company repeatedly defended this wildly unpopular tip-swiping pay model over several waves of public controversy The real controversy is why, in 2020 and only in the USA, do we have a business model that offloads the employee compensation responsibility onto customers?

CriticalCathed 7y ago

The other thing is that these services aren't even a good deal for the customers. I can order chinese from a local place by calling them and pay 30 instead of 20 w/ delivery, but with Doordash it ends up being almost double not including a tip. I'm not sure where the customers are coming from outside of drunks. It's not a good value.

notwedtm 7y ago
Because you're prioritizing for value. A lot of people prioritize for convenience.

Apocryphon 7y ago

So how do other food delivery companies avoid this? Isn’t it a commodified service?

burlesona 7y ago

What I struggle with is why anyone would deliver for Door Dash if the pay is so bad. The article closes with a statement that they want $15/hour plus expenses for drivers. The obvious problem is that I can’t see customers paying that much for delivery - ie. at those wages Door Dash can’t exist. The fact that people choose to do the work makes me think there are people who find it worthwhile, and I can explain a few scenarios that make a lot more sense than the ones in the article: I live in SF, which is only about 7mi by 7mi square, so if you do door dash here it’s very unlikely for a delivery to require more than 2-3 mi of travel. Further I see a lot of deliveries made on bikes, skateboards, scooters, etc. so the cost is much lower than the suburban deliveries made by car. I see a lot of young delivery people, who I imagine may be high school or college students who just want a few bucks spending money without any kind of time commitment, and maybe this works nicely for them. Regulating the wages to try and turn door dash into a “family feeding” job seems like it would do nothing but kill the business (and all the gig businesses), depriving people who want that kind of ultimate flexibility of the freedom and also depriving customers of a really convenient service. But I do think regulation could be very beneficial in creating transparency around payment to both the customer and the gig worker. I can see no reason the companies should be allowed to obscure what they pay their workers, where tips for, how many miles the worker traveled on a job etc. That kind of information is fair and reasonable to provide, and would help avoid gig companies exploiting people who unfortunately may not understand how to properly value their expenses. The final thing I would argue is that it’s reasonable to prohibit blind auctions, as door dash does. Instead of randomly pairing a person to a job, giving them only seconds to respond, and penalizing them (by not offering more) if they fail to respond, it would be much more fair to have a real-time auction map showing all deliveries that need to be picked up in a certain area, where they need to go, how much the pay is, and then letting them “sit on the map” and slowly tick up in price until a worker picks one. That’s a half-baked brainstorm so maybe that’s not the right implementation, but my point is simply: 1. I think regulating gig wages is a blunt instrument that would mostly end the gig companies and possibly entrench one or two mega corps as survivors that are still exploitive toward workers - whereas providing information transparency could potentially preserve the good things about gig jobs while eliminating the majority of bad outcomes for workers. 2. The real problem seems to be that there are so many people in need of “family feeding” jobs who are working for Door Dash etc. instead. When we talk about a “historically low unemployment rate,” things like this make it ring hollow to me. Clearly there are a lot of people unable to get better work, who as a result are really hurting economically, and we need to do a better job measuring and understanding that problem so we can respond more effectively to it.

notwedtm 7y ago

Wow, I don't think I've seen a comment quite this long on HN that failed 100% to provide anything substantive to the conversation. Kudos.

TrackerFF 7y ago
Companies that exploit workers by skirting around labor laws need to be regulated, do you really need more substance than that? It's not like this a one-off occurrence.

koolba 7y ago

Do DoorDash or if it’s competitors allow delivery drivers to set their own prices or max distances before receiving bids? For example, can you say in advance “Only accept $25+ jobs” or “Max distance 5 miles”?

loceng 7y ago

I think legislation is needed for 100% of "gig economy" platforms to in real-time state to the customer exactly how much the service provider is getting paid: how much if my Lyft driver getting - and what cut is Lyft taking, etc.

JumpCrisscross 7y ago
> in real-time state to the customer exactly how much the service provider is getting paid: how much if my Lyft driver getting - and what cut is Lyft taking, etc. What’s the benefit of real-time reporting? Just require disclosure on the receipt.
- frandroid 7y ago
  That's basically real-time.
- ninkendo 7y ago
  A charitable interpretation would have assumed that’s what they meant.
TrackerFF 7y ago
Consumers need to learn the real value of what's happening, and realize that low prices are not sustainable.
Simon_says 7y ago
Why should the customer care? The driver is the only one in a position to decide if it's a good deal.
- bigwavedave 7y ago
  What do you mean, "why should the customer care"? If I'm being told that what I'm paying is a tip, I expect it to go to the server. I expect the administration fee to cover administration, I expect delivery to cover deliver, and I expect the tip to go to the driver, not to be taken by management whenever profits are down or their pricing model fails. But since companies can't be trusted to be honest with the consumer about what I'm paying for (even when spelled out with line items), I only ever tip cash when my food arrives.

sbr464 7y ago

I’ve heard from some restaurants that the main reason for not supporting delivery companies is the large # of chargebacks. I’d be curious to confirm.

TrackerFF 7y ago

If consumers aren't willing to pay more, then I truly hope this gigging economy goes down the drain. I live in a country with extremely strong labor laws, and for the past 3-4 years we've seen more and more of these gigging companies / startups try, and surprise surprise, they're fighting tooth and nail to get around labor laws - because that's where their edge and profitability lies. This is gonna sound harsh, but If you live in a country with abysmal labor laws, and you're getting exploited by companies like that...well, I don't particularly care. You need to get your laws and rights fixed, that's all I can say. But to bring this garbage here, that's where I personally draw a line.

ggm 7y ago

We're destroying society, one working norm at a time. This is ludicrous, and the lack of regulatory oversight of this kind of vampire game, which winds up ripping off the food source, and the delivery agent in some wierd game of capitalism is a huge black mark on our generations time. I cannot think of a reason to want to take work in the developed west, and casually turn it into this kind of serfdom. Every time I see gig economy workers in developing world economies, I think about this, and how immoral it is to uplift their drudgery and replace it into our context like there is no downside. Has anyone else here read "Down and out in Paris & London" which is Orwell's record of his time in the Paris restaurant business, and then as a tramp (bum) on the road between workhouses in the UK? This is what we're going back to. This is insane. We have to stop backing the gig economy.

danans 7y ago
> This is insane. We have to stop backing the gig economy Vote to regulate it in your state like CA has started to do. Individual behavior change won't change this system, but system wide regulatory signals can.

thelookingglass 7y ago

I wonder what that 12.6 billion market valuation will drop to after the crash

synaesthesisx 7y ago

This is why we need autonomous delivery services. Exploiting robots is acceptable, exploiting humans on the other hand isn't. I've seen a couple of these around in LA ( https://thespoon.tech/postmates-serve-robot-spotted-and-filmed-making-deliveries-in-la/ https://thespoon.tech/postmates-serve-robot-spotted-and-film... ) and can only hope they become mainstream in the very near future.

DraftDodger67 7y ago

It seems like the biggest problem that 'Mariah' at the top of the article faces is that she has too many children, no partner, and her car is too fuel inefficient. The best way to help people in her situation is to encourage family planning, marriage, and cheap electric vehicles.

lobster45 7y ago
Yes, this would be ideal, but what about the people who are already in this situation? Are they a lost cause?
- DraftDodger67 7y ago
  The taxpayer is already picking up the tab with food stamps.

ipince 7y ago

It'd be interesting to do this analysis with other type of vehicles, like scooters or bikes. The mileage/depreciation is substantially lower, to the point where it might not be that bad of a pay (and if you're biking, you can get some exercise too).

nbabitskiy 7y ago
>> if you're biking, you can get some exercise too Moscow is now full of delivery guys on bikes, sometimes electric, at ~0°C. I wonder if delivery services advertise it as work benefits.

kangaroozach 7y ago

Sophisticated companies preying on unsophisticated small businesses (workers). This is the same garbage that convinced many businesses that selling Groupons was good for them when clearly it wasn’t. The same thing that gets drivers to exchange the equity in their vehicle for money while giving away their time for free. They optimize their business models and pricing to take the most advantage of an endless pool of desperate individuals just seeking to get by. Meanwhile well regarded VCs and celebs get rich before the entire model inevitably proves to be bogus. It’s a total scheme. But stealing tips is as low and unethical as it gets. By definition a tip is a direct payment to the service provider. Even pooling tips is not ethical. But literally stealing tips is false advertising. They are selling tips and delivering something else. Call it something else, but if you call it a tip and don’t pass 100% to the delivery person you are an unethical person. And this is coming from a free market capitalist.

bubblethink 7y ago

I recently discovered that doordash also jacks up the prices of items. $7 sandwich = 7 + 2 in markup + 2 in delivery/service fees + 2 in tip if you tip = 13. So you pay roughly twice the amount and everyone is unhappy at the end other than doordash. How is this business model still working in the US ?

jamisteven 7y ago

These "gig" and "service" companies are simply re-defining minimum wage and taking advantage of a segment of the populace that cant get minimum wage jobs for one reason or another. But yea, dont want 1.45 an hour then find another job. Dont want to be broke AF then dont have 3 kids. How can anyone take the examples in this article even remotely serious.

TrackerFF 7y ago
>> But yea, dont want 1.45 an hour then find another job. >> Dont want to be broke AF then dont have 3 kids. Life is pretty uncertain and dynamic, it's entirely possible to be a parent w/well paying job, until you don't have it anymore. Victim blaming is BS.

jariel 7y ago

This model simply isn't sustainable and only cash from gullible investors, perpetual scammy behaviour, and a never ending cycle of people trying to work for them for a while, especially while ignoring costs such as wear and tear on their car, and the fact they can skip all of those other things like health insurance, training etc. - keeps it afloat. It's time for these experiments to crash under the weight of the free market and basic regulation. This is not the American Dream, quite the opposite.

ajcodez 7y ago

I can see why they did it that way. Fixing the algorithm would require setting the base pay relative to delivery cost and then canceling orders that don’t tip enough to get accepted. Not exactly palatable for customers. ”Your order was not accepted by any drivers. Try again!”

whatitdobooboo 7y ago

Some valid points maybe but the article is a little misleading, bolding the $1.45 but then right after saying "after mileage and expenses." Not sure what a company like doordash can do in that case, are all doordash drivers driving fuel efficient cars? Also, what factors in is that many people cannot afford cars that are in good shape. Tips aspect is inexcusable, however.

hurricanetc 7y ago

This is supply and demand in action. From a strictly capitalist perspective DoorDash should continue to drop wages until people stop working for them. The equilibrium is obviously lower than their current payouts or people wouldn’t continue driving for them. I don’t think it is possible to make money in the gig economy driving a vehicle. These articles talk about direct car expenses but never talk about indirect. If you factor in vehicle depreciation I am convinced that the net wage for driving is below $0.

yspeak 7y ago

If you don't like it don't work for them. Why is that so difficult ? Don't overregulate.

walterkrankheit 7y ago

We have similar issues in Berlin with wildly exploited workers... the only thing that keeps it one step above here is that they are all bicycle driven, so fuel costs are not a factor.

d0100 7y ago

Why are people working for door dash with cars? This is the kind of job for motorcycles and bycicles (in denser cities)

darkmagnus 7y ago

People really need to learn to cook....

gerardnll 7y ago

Another one of those businesses that survive by worker slavery. Shameful, they all should go bankrupt. Also, tips in a lot of jobs in USA are now basic for a job to be sustainable, incredible. Maybe 'Tip' is no longer the appropriate word for that. How are they allowed to pay such a misery?

didibus 7y ago

I'm still confused why would people keep working for DoorDash? No other jobs around? Would they just be unemployed if DoorDash closed down? Is it that DoorDash actually tricks people into working for them with hope of a higher wage which never comes? I'm against the practices they put in place, but am more leaning on better universal income, health, basic amenities, things like that. And I'd hope that if that was the case, it would also mean no one works for DoorDash making 2$ an hour, since that's less then your universal benefits would even give you. But I'm not sold on any one idea. So I'm asking to help refine my opinion. I feel I'm missing a piece of the picture here.

nextlevelwizard 7y ago

This is pretty simple. If you make just enough for gas and can't feed your kids, you need to find another job. This is exactly the same out cry every restaurant server makes: "without tips I couldn't live! so you are responsible to tip if you eat out". When in reality they have to make enough to keep working, so that is just social pressure from them to bleed out money from rest of us. In no other job would we tolerate this kind of behavior. Why should we feel bad for these people?

fapjacks 7y ago

This rent-seeking behavior is amplified in its ridiculousness because of how expensive DoorDash is to begin with.

willart4food 7y ago

It's a race to the bottom, whoever charges less "wins".

wayanon 7y ago

Is there no payment in the US to parents from the Gov for parents? Eg in UK there is ‘child benefit’. An amount of money paid per child.

lr4444lr 7y ago
The Earned Income Tax Credit essentially does this, as does the general tax exemptions you can declare by having dependents.
- ian0 7y ago
  Child benefit are payments remitted to parents regardless of working status not a tax credit

mabbo 7y ago

Is anyone else starting to get the feeling that "gig economy" is this generation's "multi-level marketing"? People who don't know any better get sold on the "be your own boss, earn what you put in" concept. Reality doesn't match expectations. The people work their asses off and wind up with a lot less money than they expected because costs and actual spent time aren't taken into account. The people they're working for continue to make lots of money. People quit, but are soon replaced by the next sucker. MLMs still exist and are going strong, but culturally we're more aware of what they are. But maybe we're becoming more aware of what "gigs" are. Perhaps, and I both love and hate myself for saying this, 'the gig is up'?

LudwigNagasena 7y ago
> "gig economy" is this generation's "multi-level marketing" >People who don't know any better get sold on the "be your own boss, earn what you put in" concept. I personally know no person who thinks driving Uber or delivering food is a job where you are “being your own boss”. It seems like these jobs are generally perceived as low-status low-paying jobs for people without education who have no better opportunities.
- apacheCamel 7y ago
  I have many friends who have pretty average jobs who also do Uber/DD on the side. They just view it as a part time job that they can choose to do whenever they have extra time. I think it is a bit much to say it is for those without education or no other opportunities.
matthewaveryusa 7y ago
I always thought MLMs were a bit of a joke and no longer existed. In the social spheres I willfully interact with MLMs are always the butt of a joke. In my whole life I've never had a close or distant friend try to sell me something. Then my first child was born, and there's a great mixing of classes and social circles that happens. You no longer necessarily choose the adult friends you interact with. All of a sudden, the whatsapp chat we setup among parents to coordinate 'kids things' became yet another platform for these MLM moms to push their shit (the dads are too busy talking about sports and gambling.) It's really sad, desperate, and shows a complete lack of social awareness -- something I was never exposed to. I was once stumped in trying to figure out why people do things against their own interests, but the MLM moms gave me the answer: A lot of people lack the critical thinking, distancing and math I consider fundamental.

boh 7y ago

It's becoming abundantly clear the real innovation from on-demand services (including ride-sharing companies), is their ability to transfer more money from labor to capital with complex pay structures. For many if not most of these companies, its their only means towards profitability. For instance, any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers. Tech has long lost the glow that prevented the public from scrutinizing whether a VC subsidized, underdeveloped business model is good for society. So far the answer seems to be no.

soared 7y ago
> any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers Outrageous claim. Source?
- boh 7y ago
  Uber's own P&L. An article regarding the P&L: https://www.nakedcapitalism.com/2017/12/can-uber-ever-deliver-part-eleven-annual-uber-losses-now-approaching-5-billion.html https://www.nakedcapitalism.com/2017/12/can-uber-ever-delive...
- mlthoughts2018 7y ago
  It’s outrageous to say that is an outrageous claim at this point. To suggest Uber had other means of obtaining profitability would be the incredible claim needing tons of new evidence, not the other way around.
scarface74 7y ago
How could cutting drivers pay without cutting prices to increase demand raise revenue? It would raise profit possibly or in Uber’s case reduce losses.
- Lavery 7y ago
  The cost to Uber users is not the same as revenue to Uber corporate. Uber corporate revenue is net of driver pay.

deleted 7y ago

[deleted]

why-oh-why 7y ago

It’s kind of surprising that anyone who works for these services for more than one day keeps working in these conditions. If you made $50 in one day and spent $40 in gas, why work again? Does Doordash pay more initially to “get them hooked?” It’s definitely predatory practices of people who don’t understand that, after a day of work, you should have more money than what you spent.

save_ferris 7y ago
In some cases, people value the flexibility. In other cases, there aren’t a lot of better options for people. > it’s definitely predatory practices of people who don’t understand that I find it hard to believe that after so many gig economy apps have been scrutinized over this, they simply don’t understand. Some of them have to understand, and just don’t care, because they’re trying to cash in on their equity.

squiggleblaz 7y ago

According to the article, the standard delivery fee is 5.99 and there's a 10% service charge. Surely the purchaser thinks "I'm paying 5.99 to the driver and 10% to DoorDash". It feels like theft. The company is telling the customer one thing, the driver another thing, and stealing the difference.

arcticfox 7y ago
That's plausible, although as a relatively naive user, I always thought the 5.99 + 10% was just how they decided to calculate the price to scale with the cost of the order. I never thought that the 5.99 was all for the driver. I might be in the minority though, it would be interesting to see how masses of people generally read that language.
Spivak 7y ago
I have never assumed that the "delivery" and "service" fees went straight to the driver. The "delivery fee" is the premium I pay to get my food delivered and the "service fee" is the premium I pay for using X service to place the order. Trying to assume anything about where each dollar goes once you pay is a little silly. Those line items are prices for services. I mean when you order Papa John's for example they tell you explicitly that the delivery fee isn't a tip for the driver. In some vague but not terribly meaningful way your delivery fee does pay for the driver's wage but so does the every other form of revenue.
- squiggleblaz 7y ago
  Hi, that's not what I said. If I go to AirBNB, it has a cost of the rental and a service fee. I assume that the rental cost goes to the owner, and the service fee goes to AirBNB. And likewise, if there's a delivery fee and a separate service fee for a delivery, I would assume the delivery fee goes to the one who does the delivery and the service fee goes to the middle man. What's the point otherwise? Why not just merge them into one single fee?
  - Spivak 7y ago
    > Why not just merge them into one single fee? If you had to add "delivery: $5.99" and "process order through FoodApp: $1.99" to your cart would it make more sense? They're services your purchasing. Do you expect the money for the pizza goes to the chef? > I assume that the rental cost goes to the owner, and the service fee goes to AirBNB. Why? Hostels.ru negotiates a rate with hotel chains and then charges you as much as they think they can get away with. No reason to think they're related.

uptown 7y ago

Almost none of these DoorDash / Uber / Lyft drivers are doing the math with consideration of the wear-and-tear on their vehicles, nor the increased likelihood of accidents given they're out on the road more than they otherwise would have been. These are net negative "jobs".

doctorOb 7y ago
A job in the hand is worth two in the bush. The friends I've had who drove for DoorDash and/or Lyft were in between proper jobs (e.g CVS and reception at a hospital or something), and that in between period was lasting longer than they had the savings for.

mattmaroon 7y ago

Door Dash is so fucking shady. I ordered something from a local restaurant there. When the food was 45 minutes late, I drove there. Turns out the restaurant had never even heard of Door Dash.

thomk 7y ago

Yeah, fck DoorDash. DoorDash is the worst of all of these types of gig services. They are expensive, late, forget to grab items from the restaurant and they are not careful with food. After a few times using them (and getting a different delivery person every time) a chilling thought occurred to me. There is nothing preventing a driver from either eating part of your food or tampering with it. Think about that. A total stranger is completely alone* with your food with zero oversight. Once I was at a Starbucks when I saw the strangest thing. Some dude rushes in with a carryout bag and sat at the nearest table. He opened the bag, opened one (of many) styrofoam containers and hurriedly ate only part of one meal. Then he packaged it all back up and drove away without buying anything from Starbucks. At least in a restaurant you are dealing with employees and people are everywhere. DoorDashers work for a massive faceless corporation who has been shitty about pay and tips. Why wouldn't they grab a bite or two?

anthonypasq 7y ago
luckily I would know if someone ate some of my pizza
hmschreck 7y ago
The final time I ordered from DoorDash, the driver ignored directions (which no one else had ever had issues with), didn't tell me there was something wrong with the directions I had sent him 10 minutes in until over half an hour after leaving the restaurant (my apartment is a 7 minute drive in normal traffic), and I had to call him to get him to tell me that much. He refused to listen to the directions, and when the address that I live at didn't work for him, demanded a different address. DoorDash support then demanded the same, but I told them I was not allowing an obviously irate man to come to my apartment. It took me 20 minutes to get them to assign a new driver so I could give my address. I am never dealing with them again.

e_tm_ 7y ago

Tip in cash.

rutherf0rd 7y ago

Although the claims seem reasonable, the dataset is fairy small, 200 data points. It would be great if they continued to build the data, and even better if they opened it up.

Balanceinfinity 7y ago

It's a free country - the drivers can choose to take the assignments or choose not to. What they (and customers) are entitled to are accurate information so they can make choices about whether this is in their interest. It's easy to say "Door dash should pay more," (and they probably should), but that might cut customer usage by 40%, which means half of the people driving wouldn't be able to drive. The one thing that Door Dash shouldn't be able to do is duck payroll taxes, so that these people have social security benefits.

gadabout 7y ago
Curious, where does 40% come from?
- Balanceinfinity 7y ago
  hypothetical number - chosen for the sake of argument

makecheck 7y ago

As we get closer and closer to “no need for cash”, I find with food delivery I always want cash around for tips because it is the only way to know for sure what happens with the money. I shouldn’t have to do that.

no_flags 7y ago

I don't think using the IRS mileage number is an accurate way to calculate costs of operating a vehicle for a couple reasons. Consider this report from AAA: https://exchange.aaa.com/automotive/driving-costs/ https://exchange.aaa.com/automotive/driving-costs/ Notice that the cost per mile actually goes down the more miles you drive! You have to drive 20,000 miles to get down the ballpark of the IRS number. This indicates that expenses affected by mileage like gas, maintenance, and depreciation are dominated by up front costs like insurance and taxes. Now consider that most door dash drivers already chose to have a car before working for door dash, so they will have to pay the up front costs regardless. For this reason, I don't think $0.58 per mile is a good estimate of the marginal cost associated with extra driving for door dash. The AAA report estimates gas and maintenance costs per mile at $0.17 to $0.23 depending on the type of car. Second, I don't believe it is right to include depreciation in a household budget because it does not manifest as an additional cost on top of the price of the car. Unless the car is listed as a line item on your household budget, you don't have to account for any additional loss in value. Imagine that you bought a car in cash for $1000 and never drive it. You lose the $1000 immediately. If some years later the car is worth $0, your total cost of ownership is still just $1000, not $2000. I believe the fact that people still chose to work for door dash is additional evidence that the estimated costs in this article are too high. We may not be perfect rational actors, but most of us can tell if our bank account is going up or down. None of this excuses the unethical behavior of door dash, and personally I choose not to use them. I believe tips are intended as a gift to the driver, so it is misleading to call it a tip if the driver isn't getting it. That said, I didn't find this analysis convincing for the reasons above.

coryfklein 7y ago

Tipping is an outdated social concept that needs eliminating. If my Costco cashier is a dick to me, I report that to his manager and he gets disciplined. If my Costco cashier is super slow, his manager notices and he improves or gets fired. Now why does this whole incentive/reward model get flipped on its head when this person is delivering food to my table (or door)? If my DoorDash driver takes a long time, I have NO IDEA whether that's because traffic was bad, there was snow on the road, the restaurant was busy, etc. What is even the purpose of the tip? I'm more and more convinced, especially after doing a 7-day cruise last week, that tips are kept in place by the establishment merely as a way to lower perceived prices. DoorDash wants to charge you $25 for something, but advertise that it only costs $20. DoorDash is in a much better place than I to detect patterns of performance in their employees, as are restaurant managers, haircut salons, the list goes on. In the end, the world would be a better place without tips. Those most capable of monitoring service quality would be stuck with that responsibility, prices would be communicated transparently, and, above all, total prices wouldn't even change anyway!

ZainRiz 7y ago

> Our analysis of more than two hundred samples of pay data provided by DoorDash workers across the country finds that DoorDash pays the average worker an astonishingly low $1.45/hour Key words being "provided by Doordash workers". Meaning at all of this "analysis" is based on the numbers being given by the most disgruntled workers who presumably make the least. This makes all their conclusions highly suspect. And if these disgruntled employees are aware that they're getting such a raw deal from Doordash, I'm wondering what stops them from going to a different company like Uber or Lyft instead. Those reportedly let people earn about $25 per hour (before expenses I think).

fulldecent2 7y ago

How can companies be incentivized to WANT to hire employees rather than having contractors be the default choice?

fulldecent2 7y ago

Regarding IRS Standard Mileage Rates. There are different costs to insure a vehicle based on whether it is "personal" use or "business" use. The IRS rate does not distinguish these. Is there any documentation on which scenario IRS is assuming this applies to?

beatgammit 7y ago
I don't know, but I ran my own numbers for my car and ended up with $0.25/mile. I counted: - insurance cost of second car (liability only) - depreciation - gas - maintenance and estimated repairs This was for my car, which was ~5 years old when I got it and is very fuel efficient. I found that depreciation makes up more than half of the total cost, so a newer car would likely have more depreciation than an older car. I got mine for $10k, and in 5 years, it's worth $5k. I think that's pretty common, regardless of the age of the car, so a ~$20k car would depreciate to ~$10k in 5 years. Also, newer cars are more expensive to insure, and taking a car to a shop is more expensive than doing it yourself. So $0.50 sounds reasonable for the average, relatively new car that is taken to the shop for maintenance and repairs.
beatgammit 7y ago
I don't know, but I ran my own numbers for my car and ended up with $0.25/mile. I counted: - insurance cost of second car (liability only) - depreciation - gas - maintenance and estimated repairs This was for my car, which was ~5 years old when I got it and is very fuel efficient. I found that depreciation makes up more than half of the total cost, so a newer car would likely have more depreciation than an older car. I got mine for $10k, and in 5 years, it's worth $5k. I think that's pretty common, regardless of the age of the car, so a ~$20k car would depreciate to ~$10k in 5 years. Also, newer cars are more expensive to insure, and taking a car to a shop is more expensive than doing it yourself. So $0.50/mile sounds reasonable for the average, relatively new car that is taken to the shop for maintenance and repairs. Insurance was a pretty small item in my calculations, so I doubt the difference between corporate and personal insurance would change the figure that much.

Data_Junkie 7y ago

Another system of mass stupidity. Our "leaders" should be absolutely ashamed of this disgusting "advancement" they have allowed to perpetuate uncontrolled. It's pathetic, and everyone knows it. Yet once again nothing will happen to improve things, they will "tweak" the algorithm and call it a day.

birdyrooster 7y ago

I recently ordered food from a Bay Area Mexican restaurant. I was floored by the $63 total from Door Dash, so I decided to pick up the order myself. Upon arriving to the restaurant, the price came to $60. I found that the prices at their restaurant were higher than the DoorDash menu prices by about 15%. This means that the restaurant is forgoing 15% for their food just to be affordable enough to get orders.