What to Know
The New York Times found that DoorDash didn’t provide its delivery people will full tips, instead relying on a guaranteed flat wage.
The company’s CEO recently explained the company’s plan on Twitter, and why it was paying a flat rate.
But the CEO, Tony Xu, said it will change its policy to give delivery people full tips moving forward.
DoorDash CEO Tony Xu said on Twitter on Wednesday that the company will soon change its policy to make sure that its drivers receive the full tip given by customers.
The comments come following a backlash against DoorDash after The New York Times revealed that, while a DoorDash delivery person was guaranteed a minimum for a delivery, customer tips were not included in full on top of the delivery payment. DoorDash had told The New York Times that dashers preferred working for a flat fee in case people did not tip at all.
NBC recently explained that companies like DoorDash and Instacart have insisted that this model helps drivers receive more consistent and fair earnings, even though customers often assume 100 percent of the tip goes to the delivery person.
”After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible, ” Xu said on Twitter. “But it’s clear from recent feedback that we didn’t strike the right balance. We thought we were doing the right thing by making Dashers whole when a customer left no tip. What we missed was that some customers who *did* tip would feel like their tip did not matter.
Xu said the strategy was not built to pay the company’s delivery people less. “In fact, when we moved to it, our average contribution to Dashers stayed the same,” he said. But that will change.
“Going forward, we’re changing our model - the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order,” Xu explained.“We’ll have specific details in the coming days.”
DoorDash was not immediately available to comment on when the policy change will go into effect.
This story first appeared on CNBC.com. More from CNBC:
- Tesla falls after posting wider-than-expected loss
- South Korea says North Korea has fired two unidentified projectiles into the sea
- Amazon has ‘destroyed the retail industry’ so US should look into its practices, Mnuchin says