DoorDash said on Wednesday that it will give its delivery drivers the option of being paid an hourly minimum wage, rather than making money for each delivery.
The significant shift in pay could be a response to concerns that some couriers are not being paid fairly. It could also incentivize drivers to pick up smaller orders that don’t pay as well and which they would normally avoid.
Drivers can choose to earn money for each order — typically a few dollars in base salary plus compensation for miles driven — or a flat hourly rate, DoorDash said.
The hourly rate only includes the active time, i.e. the time between accepting and placing an order, but not the period in which the drivers are waiting for the next order. Drivers can switch between the two payment methods. The company said tips would be in addition to the hourly base wage.
DoorDash, which uses gig workers to haul groceries and other supplies, announced the change during Dash Forward, a product event celebrating DoorDash’s 10th anniversary.
DoorDash said it added the payment option in response to driver feedback and giving drivers more decision-making power.
“One of the things we’ve heard a lot is about choice: choosing when, where and how to make money is really important,” said Cody Aughney, leader of the company’s Dasher & Logistics team.
The relationship between gig workers and companies like DoorDash and Uber has come under scrutiny from regulators and labor activists in recent years. The biggest questions were about the classification of these workers and whether they are being adequately paid.
Gig drivers are typically independent contractors who are responsible for their own expenses and do not receive benefits like full-time employees. They have long complained that they are underpaid and sometimes exploited by the companies.
DoorDash said drivers who opted to pay hourly and those who make money per delivery would likely make a similar amount. Minimum pay depends on region and ranges from $10 to $19.50 per hour, the company said.
The new payment method is similar to Proposition 22, a 2020 California voting measure backed by gig companies that guaranteed drivers a minimum wage and other limited benefits in exchange for not being classed as employees.
However, according to DoorDash, there’s one big difference: Drivers can switch between hourly and delivery pay as often as they like. The new system won’t be deployed in California, Seattle or New York – areas that have enacted minimum wage laws for drivers.
Sergio Avedian, a longtime driver and contributor to The Rideshare Guy, a blog that provides tips for gig drivers, said an hourly pay option “gives drivers a certain comfort zone.”
Mr Avedian, who encourages drivers to refuse orders that are unlikely to offer a decent payday or good tip, said hourly payment could be a way for DoorDash to get them to accept smaller deliveries they make would have skipped.
“On their side it’s about enforcing as many commands as possible and on the driver’s side it might give them some security,” he said.
With some drivers rejecting less desirable orders, DoorDash says those who accept whatever they’re offered receive a disproportionate amount of these cheaper supplies and are penalized. The hourly minimum wage will help this group, the company says.