DoorDash will finally fix its controversial tipping structure

Food delivery service DoorDash has been under fire over revelations that customers' tips were going to DoorDash itself, not to the delivery partners actually bringing users their burritos and kung pao chicken -- effectively subsiding Dashers' pay instead of adding to it, as tippers intended.

Now they've revealed a new tip structure, promising every tipped dollar will go straight into Dashers' pockets, on top of their guaranteed base rate and bonuses. The new model is currently being tested and will roll out to all Dashers over the next month.

While the existing scheme wasn't a secret, in July a New York Times reporter spent 27 hours as a Dasher and explained the structure in plain detail:

DoorDash offers a guaranteed minimum for each job. For my first order, the guarantee was $6.85 and the customer, a woman in Boerum Hill who answered the door in a colorful bathrobe, tipped $3 via the app. But I still received only $6.85.

Here’s how it works: If the woman in the bathrobe had tipped zero, DoorDash would have paid me the whole $6.85. Because she tipped $3, DoorDash kicked in only $3.85. She was saving DoorDash $3, not tipping me.

After the chorus of criticism that emerged in the wake of the report, DoorDash cofounder and CEO Tony Xu tweeted that the company "didn't strike the right balance", admitting the structure had been designed to pay Dashers the minimum amount whether a tip was given or not, but customers weren't aware that they were subsidising DoorDash's contribution to that amount.

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DoorDash promises the new structure, outlined in a blog post on their website, will put more money in Dashers' pockets.

Under this new model, base pay from DoorDash to Dashers will increase and will range from $2-$10+ per delivery depending on the estimated duration, distance, and desirability of the order. Deliveries that are expected to take more time, that require Dashers to travel a longer distance, and that are less popular with Dashers will have higher base pay.

It will also allow tipping before and after delivery, meaning customers who want to tip a Dasher for an extra positive experience or extra-mile service will be able to do so instead of having to either make a call when they order or dig around for cash.

The Rideshare Guy blog shared a post from "Dash Bridges," a San Francisco-based Dasher who participated in a focus group session on the proposed new structure at the company HQ with other Dashers. While there was still significant rancor about the two years of skimmed tips, the main request was greater transparency about pay rates.

As "Bridges" notes, Dashers have been aware of -- and complaining about -- the skimming practice for some time, but it was only after the customer outrage spurred by the NYT report that they sprang into action to make the change.

And yes, tipping culture effectively saves service-industry employers all over the U.S. from having to pay workers a living wage -- but in DoorDash's case, the numbers are clear, and largely out of step with other gig-economy services like Uber Eats and Postmates.

The revised structure will likely not affect the class action lawsuit filed in New York last month by a Brooklyn resident, stating that DoorDash "engaged in unlawful and deceptive acts, practices and misconduct by misleading Plaintiff and the consuming public to believe that the tip amount entered on the DoorDash app would be received as a tip by the DoorDash delivery workers for their service."

It's also worth noting that DoorDash just acquired Scotty Labs, an autonomous driving startup. Delivery robots might be a while off yet, but the day when they demand fairer pay structures is farther still.