DoorDash, the largest food delivery service in the United States, announced on Wednesday that it will offer its delivery drivers the option to be paid a guaranteed hourly minimum rate instead of being paid per delivery. The new option, which will roll out nationally through the end of the year, is a novelty in the gig worker industry and a significant shift in the company’s business model. DoorDash said the hourly rate will range from $10 to $19.50 per hour, depending on the region, and will include only active time, meaning time between accepting and dropping off an order. Drivers will be able to choose whether they earn money for each order or receive a flat hourly amount, and will be able to toggle between the two payment methods. Tips will be applied on top of the hourly base pay, the company said.
There are many benefits of this policy for delivery drivers. Firstly, the hourly pay option will give drivers more predictability and stability in their earnings, as they will not have to worry about fluctuations in demand, order size, or distance. Secondly, the hourly pay option will incentivize drivers to pick up smaller or less desirable orders they might typically avoid, as these will not affect their hourly rate. This will help improve the efficiency and reliability of the delivery service for both customers and restaurants. Lastly, the hourly pay option will also give drivers more choice and flexibility in how they work, as they can switch between payment methods depending on their preferences and circumstances. DoorDash said it introduced the new option in response to driver feedback and because it wanted to give drivers more decision-making power.
Wage-Based Food-Delivery Services
DoorDash is Offering Drivers Hourly Wages with a New Policy
Trend Themes
1. Hourly-based Pay - Adopting an hourly pay model provides predictability and stability for gig workers and helps incentivize them to take on more orders.
2. Increased Efficiency - The hourly pay option encourages drivers to accept smaller or less desirable orders, leading to improved delivery service efficiency and reliability.
3. Flexible Payment Methods - Offering drivers the choice between hourly pay and per order pay gives them more flexibility and decision-making power in how they work.
Industry Implications
1. Food Delivery - The shift to hourly wages presents an opportunity for food delivery platforms to attract and retain drivers by providing more stability and predictability in their earnings.
2. Gig Economy - Implementing hourly-based pay in the gig worker industry can help address concerns related to fluctuating demand, order size, and distance for various gig platforms.
3. On-demand Services - The introduction of hourly pay as an option highlights the importance of flexibility and choice in on-demand service platforms, allowing workers to adapt to their preferences and circumstances.