DoorDash reveals details of its new tipping model – TechCrunch

DoorDash reveals details of its new tipping model – TechCrunch

DoorDash introduced final month that it might be changing its controversial tipping model. Today it’s revealing the fundamentals of how the new system will work.

Under the previous model, Dashers (DoorDash drivers and different supply folks) had been assured a minimal cost per supply, with DoorDash paying a $1 base, then offering an extra cost increase when a buyer’s tip wasn’t sufficient to fulfill the minimal — a system that made it seem to be suggestions had been getting used to subsidize DoorDash funds.

Under the new system, DoorDash pays a base between $2 and $10 (the quantity will depend upon issues like supply distance and period), with extra bonuses from DoorDash.

Most crucially, as CEO Tony Xu put it in a blog post, “Every dollar customers tip will be an extra dollar in their Dasher’s pocket.”

Now, you would possibly assume that’s how suggestions are all the time presupposed to work, however Xu stated the outdated system was developed “in direct response to feedback from Dashers,” whereas the new one will lead to “greater variability in total earnings from order to order” (that variability is one of a number of the reason why tipping is a flawed compensation model on the whole).

So why change?

“We thought we were doing the right thing for Dashers by making them whole if a customer left no tip, but the feedback we’ve received recently made clear that some of our customers who were leaving tips felt like their tips didn’t matter,” Xu stated. “We realized that we couldn’t continue to do right by Dashers if some customers felt we weren’t also doing right by them. To ensure that all of our users have a great experience on DoorDash, we needed to strike a better balance.”

Plus, he stated, “Dashers will [now] earn more money on average — both from DoorDash and overall.”

The firm plans to roll out these modifications to all Dashers subsequent month.

Source link