DoorDash is changing its tipping policies after customers and workers accused the company of theft

  • DoorDash plans to update its tipping and pay policies in the wake of criticism from workers and customers, its CEO said Tuesday. 
  • Under the previous model, tips were sometimes counted towards a worker's guaranteed minimum pay, which some customers said was misleading. 
  • Going forward, Tony Xu tweeted, earnings will always increase by the exact amount a customer tips.
  • Visit Business Insider's homepage for more stories. 

DoorDash is changing its pay model after customers and workers accused the delivery company of stealing tips, CEO Tony Xu said on Twitter late Tuesday.

"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," he said of the current model, in which tips sometimes counted towards a worker's base pay, instead of being added on top of an order's total.

That model, implemented in 2017, garnered viral criticism this week when a New York Times reporter noticed the practice during his 24 hours as a bicycle deliveryman.

In short, some customer tips counted towards a Dasher's guaranteed minimum pay, which is a number generated on every order by a complex algorithm that takes into account a worker's distance from a restaurant, the delivery distance, order cost, and more.

"It's clear from recent feedback that we didn't strike the right balance," Xu continued, noting the customer criticism from those who felt their "tips did not matter."

"Going forward," he concluded in the Tweet thread, DoorDash's new payment model "will ensure that Dashers' earnings will increase by the exact amount a customer tips on every order. We'll have specific details in the coming days."

The move was too little, too late in the eyes of some. Vanity Fair writer Nick Bilton replied to Xu asking: "So are you going to return all the tips you stole from poor delivery drivers over the past year?"

In wake of the DoorDash controversy, Business Insider reached out to eight of the largest gig-economy startups to ask about their tipping policy. Not one worked like DoorDash's. You can see what the companies said here.

"Customer obsession and getting 1% better everyday are core values at DoorDash," Xu said. "These beliefs have led us to improvements in the past and they serve as our guide for the future."

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