DoorDash CEO says tipping policy is changing following criticism: ‘We’re changing our model’
DoorDash CEO Tony Xu announced Wednesday that the company will change its tipping policy. (DoorDash)
DoorDash CEO Tony Xu announced Wednesday that the company’s tipping policy will change following recent criticism.
Xu’s comments come after a recent New York Times piece described how tips given through DoorDash’s app were subtracted from the amount the company pays, rather than added to what the worker receives. Andy Newman, a reporter, chronicled his time working as a delivery person for DoorDash and other companies.
His first order had a guarantee of $6.85. The customer tipped $3 via the app, but Newman said he still received just $6.85.
“Because she tipped $3, DoorDash kicked in only $3.85,” Newman wrote. “She was saving DoorDash $3, not tipping me.”
Xu tweeted, “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 got their food as fast as possible.”
The CEO continued that “recent feedback” showed the company “didn’t strike the right balance.”
“We thought we were doing the right thing by making Dashers whole when a customer left no tip,” Xu wrote. “What we missed was that some customers who ‘did’ tip would feel like their tip did not matter.”
He said that the current model wasn’t meant to pay delivery workers less.
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“In fact, when we moved it, our average contribution to Dashers stayed the same,” he wrote. “Going forward, we’re changing our model – the new model will ensure that Dasher’s earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days.”
A DoorDash spokesperson told FOX Business earlier this week that more than 65 percent of the time, DoorDash contributed more than the customer. And about 15 percent of the time, customers left nothing as the tip.
DoorDash, which has some 400,000 delivery people, is valued at $7.1 billion, according to The New York Times. InstaCart had a similar policy but pledged to change it following criticism.
FOX Business’ James Leggate contributed to this report.