DoorDash is being misleading when they imply that NYC required a minimum wage of $29.93/hr for delivery workers. DoorDash could comply with the bylaw by paying its contractors $17.96/hr for the full time they work (including time waiting for orders). But DoorDash instead chose to use the "Alternate Method" which has a 67% higher minimum wage, but only for the time the contractor is actively delivering food (not standby time). (full text of bylaw: https://codelibrary.amlegal.com/codes/newyorkcity/latest/NYC...)
The implication that Dashers earn 2x more per hour than "other workers" earning minimum wage is false, since "other workers" are paid for 100% of the time they work, including when they are waiting for work.
The other part of this is that Doordash workers need to pay for their own delivery vehicles (gas, upkeep etc.) which factors into the actual wages they get. They are not making significantly more than minimum wage workers.
What is the hourly rate for bicycle couriers in NYC? They are frequently used in the legal and real estate industry to quickly move physical documents between offices.
The delivery vehicles being used in NYC are almost entirely e-bikes, so the expense is not as big as you might be thinking. It's certainly nothing close to the cost to gig workers for running an Uber car.
So does it include health and sick pay for when you get injured or older and you’re less mobile? Cycling all the time could be way more taxing than driving.
Of course it doesn't include any of that. It's "independent contracting".
Though keep in mind they're throttle e-bikes, so there isn't a lot of actual pedaling going on. And as far as accumulated workplace injuries go, merely riding a bike is pretty easy compared to a lot of blue collar work. No, I think what'd get you here is the crashes.
I wouldn’t discount the long term health costs of breathing exhaust fumes all day either. Even as a recreational cyclist or occasional commuter in NYC I noticed it.
How often are people on e bikes getting mowed down where you live? What kind of hellscape do you live in where cycling causes you to ingest more polluted air than sitting in your bioweapon-proof, hermetically-sealed, fart-fermenting 3000 kilo Tesla? Sheesh
I’m kinda joking, but I genuinely feel bad for people who live in places where cycling makes their health worse because of the air pollution. I had to deal with that situation a few summers ago when wildfires caused ash to rain from the sky and made the air quality shit. It felt like a low-level hell.
I'm not sure if you noticed that the GP wrote "e-bike". Yes, even riding a e-bike would be more taxing than driving for many, I would say that an e-bike is much less taxing than a regular bicycle.
The act of cycling shouldn't be any sort of problem. The accidents though are another story. The e-bikes are as silent as regular bikes but much faster.
I door dash mainly in Queens & sometimes in Manhattan using an electric scooter. I have not had any extra expense so far. 80% of the time I charge my scooter at work or at the gym so I'm not really paying extra on my electricity bill lol. Also, I stick to following traffic rules and stay on the bike lane as much as possible for safety reasons. If I see a large truck coming through, and it is a narrow street, I get on the side walk and let the truck pass. It has been easy accumulating active time, especially when dashing in Manhattan. So far, I have had a good experience and it has been an easy $30+ hourly.
Can they not offset these expenses against their tax? If you’re running a business out of your vehicle, the cost of operating that vehicle is the cost of running the business which should be treated like that by the tax code.
The marginal federal tax rate for someone making $50,000 is 12%. So every dollar spent on gas (or whatever other deductible expenses) would lower federal taxes by 12 cents.
But I'd be surprised if many drivers grossed more than $50K/year. If they earn less, the tax benefit of deductibility is even smaller.
Personal income tax and the tax treatment of businesses are different - as a business, you’d earn some revenue from doordash while showing some expense (like gas, insurance premiums, and your salary). Your company would then pay tax on the net and you’d pay tax on the salary you give yourself from your company.
Not a CPA so I’m pretty sure I’m oversimplifying this and there are lower bounds I don’t know about which prevent most gig workers from operating like this.
I think we're in agreement, because I'm assuming serious DoorDash drivers file Schedule C, which is the practical equivalent of dividing your life into personal and business sections but without the paperwork (or benefit) of incorporating.
My comment was motivated by OP's question asking whether it was possible to "offset these expenses against their tax" (emphasis added). No, it's not possible to offset an expense against tax. It's only possible to offset against income. I frequently see people on HN saying things like "it doesn't matter if it's a ripoff because it's a tax writeoff!!!" If they actually look at their tax returns, they are surprised that an expensed dollar saves them only 10-20 cents, so the price definitely does matter.
Tax credits, on the other hand, are a lot closer to what people are usually thinking of when they say tax expense. If you install residential solar in the US in 2023, for example, you get a 30% tax credit. That means if you spend $10,000, your federal tax bill goes down by $3,000. If it were merely 30% deductible, then you'd subtract $3,000 from your income, which at a Doordash driver's tax bracket would reduce taxes by only about $350.
(I'm not a CPA, either, as any CPA can surely tell.)
While true this would lead to thousands of people being online without demand. If one really wants their food in 45 minutes, or an uber driver always 3 minutes away, they need a lot of people doing nothing staring at their screens for long periods of time
Capping the # of people online would cause tons of other issues, its very easy to exploit a system like that, plus it would slow everyone down
Either we want people to do things for us, want it super fast, and want to pay everyone for every second of their time. Can't have all of these without hiring a personal driver working just for you full time
> Either we want people to do things for us, want it super fast, and want to pay everyone for every second of their time.
Yes, you either pay people for every second of their time, or pay enough money for their work hours. There's no way out of this.
A courier or a taxi driver does not chose to sit on their ass the entire day. You can get a hundred orders in a row, or you can have no orders for an hour or two, and you have no control over that. And it's not like they can just get up, get a cup of cofee and go to a second job in the meantime.
Nit: Most food delivery workers in NYC are on e-bikes or mopeds. There are surely some drivers but it is prohibitively difficult to use a car for food deliveries in nearly all of Manhattan and decent portions of Brooklyn/Queens/the Bronx.
As it is there is public outcry about dangerous and aggressive riding behavior from food delivery workers. It is not strictly a bad idea to tilt the incentive structure so that while you can earn a little extra on tips for completing more deliveries, it's not such a huge part of your earnings that you need to cut corners, ride the wrong way on one-way streets, ride on sidewalks etc. to hyperoptimize your delivery rate.
I stopped using door dash when I watched multiple delivery drivers go pick up my food, sit and wait for a bit, drive in the wrong direction, pick up food from another restaurant, drive in the wrong direction to another location, then deliver my cold food.
Indeed, it would be better if doordash would just hire full time employees. And vet them before hiring with a regular interview process. Instead of constant punitive surveillance with the threat of instant unemployment.
Can you imagine if your dev job was like this? Picking up jobs to write a single function. And if youre too slow, or one too many tests fail you get sacked.
The “problem” is that many (most?) delivery cyclists in NYC aren’t legally allowed to work, so this option would be jeopardizing a large part of their workforce (bad for DoorDash) while also being bad for the workers themselves (who aren’t exactly swimming in job options). I’m not making a value judgement here, just weighing in with a tradeoff to consider.
many (most?) delivery cyclists in NYC aren’t legally allowed to work
Woah. Are you saying these people are illegal immigrants, or don't have a work visa? I never heard this before. That is a bold claim. Do you have any evidence to share? I tried Googling, but I couldn't find anything.
Weekly or monthly stack ranking? I doubt it. Probably annual or twice-yearly reviews. And how much of the stack is released for poor performance during each review? 5/10/15%? Still: Nothing compared to being a DoorDash delivery person.
I deliver for door dash as a side gig (supplemental income). If drivers try to milk the system and take an exaggerated amount of time to deliver orders, those drivers will not receive as many offers for orders (messes up their algorithm in the long term). I think the new model encourages people to drive safely and not rush and risk getting into an accident just because they work on tips and are trying to rush through traffic to get their money worth/ time worth for labor. It also does not put pressure on the consumer to tip since the delivery drivers will earn a livable wage. Employers should pay their workers a fair wage, not the consumer.
Thanks for the info. Can you share more details? Tipping a delivery person always seems bizarre to me. Any reasonable society would just pay a better wage, but instead, the US prefers slave wages plus "tips" to maaaaaaaaybe make a living wage.
They reduced the default tip amount, hide tip information from delivery drivers and moved the tipping to after the order, all together ensuring that tipping happens less & for lower amounts.
As an old person, I'd like to point out that my hometown of New York City had a dynamic, world class restaurant scene, including a cornucopia of home delivery, long before the tech platform companies found a way to siphon ~40% of consumer spend out of the local restaurant economy in exchange for some friction reduction. We were doing great. But you had a drawer full of paper menus and had to call the restaurant.
This was not very doable pretty much everywhere outside NYC. The lower density of restaurants made it harder for delivery to be a thing except all the pizza places that offered it.
That's a generalization with no supporting data. As an actual sample size of 1; I lived in a smaller city of only about 250k people and there was a huge selection of restaurants that offered delivery, not just pizza.
Honestly DoorDash when it did come reduced restaurant profits, lowered quality of food delivered, and increased consumer costs. Zero advantage for anyone other than DoorDash unless you consider being able to search for the food in a single app and paying extra for it to be cold on arrival an advantage.
That is not a generalization, that is actually a fact. Doordash and other delivery apps gradually added restaurants on their platforms and still add new ones regularly. The fact that this happened in itself is a proof that they didn’t have food delivery as an option before.
If you want more concrete data, you need to look at how McDonald’s did deliveries in Manhattan but not rest of the US until they partnered with food delivery apps. Most other fast food chains did not have their own delivery network either.
Without commenting on this topic in general, you appear to have a flaw in your reasoning. That a restaurant was added to Doordash does not prove that it never had the ability to deliver before that.
It doesn’t guarantee that they never had the ability to deliver. But the fact that delivery apps grew (kept adding more restaurants so quickly) was in part that restaurants could do delivery when previously they didn’t. The parent‘s argument was that delivery was already a norm before, which clearly was not the case.
And I also point to restaurants that are newly added to delivery platforms, because you can easily verify if they previously could deliver or not.
It’s always dependent on wear you lived. I’ve always lived in my city of at least 1mil+ and growing up before DoorDash we could never get delivery because of zip code. Now with DoorDash it doesn’t matter. Delivery has always existed but that was mostly dependent on if the restaurant wanted to come to your area.
I've lived in a city of 50k people and smaller, and in various suburbs (of major cities) and ALWAYS had a collection of delivery menus in a bag next to the junk drawer. I don't think I've even lived anywhere that didn't have a reasonable amount of delivery. That's not to say such places aren't common... just that "unique to NYC" certainly doesn't describe it.
Doordash could just employ delivery drivers to solve this problem. No need for a 100% at will temp work force. They could just hire people part time or full time. And if work is really that surgy they could just have workers on call.
Why does “innovation” have to go hand in hand with fucked up labor practices?
Because we live in a capitalist society and profit is the only objective.
Not exploiting your workforce as much as you can is an almost guaranteed road to failure.
Imagine taking investor money and saying "I'll pay more to my workers so they can have decent lives". They'd oust you in a second. Same if you're in a publicly traded company.
The only possible way this doesn't happen is if you're running an already profitable private company, you're willing to grow at slower rates (which carries its own risks), your market allows it and you're not a sociopath.
At the end of the day this is all driven by market dynamics that affect everyone. Uber Eats doesn't have a secret sauce that makes it cheaper for drivers to deliver food in cities with lower restaurant density. Someone has to pay for gas, someone has to pay for drivers' time. Even in large cities Uber Eats is now more expensive than ordering directly from restaurants in the past, why would it be different for cities with fewer restaurants?
Oh I don't think anyone said they're making it cheaper. But a lot of restaurants now have expensive delivery instead of no delivery. Before, there were very few places where most restaurants would deliver.
And if you called the restaurant enough, you typically got on a first name basis with them and had incredible customer service. Now you're just another customer #47523 that created order #37324.
We had friends who got Domino's every Thursday. On days when they hadn't called by a certain time, Domino's would call them and ask if they wanted their usual.
I got a notification from my bank when my girlfriend used her debit card to order at the local Chinese on her way home from work. I was bored so I went to surprise her... she was then greeted there every time with "is your boyfriend coming?"
Ehh some restaurants still know you on a first name basis even with DoorDash. I used to order from this one Philippine spot like twice a week and after a month a decided to go there in person to sit down and when they asked for my name they immediately asked if I wanted my usual DoorDash order
The time savings of having a digital, interactive menu, where you don't have to worry that the person on the other end will interpret "no mayo" as "extra mayo" should not be underappreciated.
I love that you have posted this. I am also old and I think about this from time to time.
Nothing makes me feel so old as observing the phenomenon of people (mostly younger) habitually ordering food through these platforms, paying $5 to $10 in platform and delivery fees per meal. All this against the economic reality that wages have not kept up with the rising cost of, well, everything and it just looks a lot like rent-seeking on the part of these platforms. I do appreciate how the platforms have brought near-universal delivery to the suburbs, but I've lived in the suburbs my whole life and I simply do not use these services due to the cost. Same goes for ride-sharing. My only usage of these platforms is when I'm traveling.
Has the local restaurant scene recovered from the lockdowns? I live in a smaller city and we have recovered some but it's nothing like it was. I heard it was particularly rough in NYC.
In my experience, the more "corporate" restaurant groups are growing but the less well capitalized small businesses are in a world of hurt trying to balance the books with the leftovers after the rise in physical rent and advertising/platform company costs.
> the more "corporate" restaurant groups are growing but the less well capitalized small businesses are in a world of hurt
Within the <$50/diner category, yes. It seems this is where the new Applebees/Ruby Tuesdays are forming. Above that, there is an explosion of creativity in the fine and pseudufine dining categories.
Here in the city, it's not just the Applebees/Ruby Tuesdays who are growing; there's another emerging level of corporate food service.
For example, a friend of mine is a data scientist who reports up into the CFO of a company that owns around 10 restaurants in New York, California, and Las Vegas. The flagship of the brand is a Michelin-starred celebrity chef.
His entire job is presenting to executives the profitability impact of experiments in changing the formulation of espresso martinis and leek soup. He says that the company is entirely, quantitatively, incrementally profit driven and "joyless, from the executive team down to the dishwashers". It honestly sounds to me like the most miserable, furthest possible thing from the romantic old new york storytelling of Anthony Bordain that could still be legally called restauranteuring.
How would you even assess the profitability of a small recipe change? You'd only notice by the time a customer comes back and there are so many variables (and time) going into that I can't imagine you could really get some signal out of your a/b-test of a few drops of chili oil in the soup.
If you have 10 restaurants you could do A/B tests.
This is massively prevalent for food science and prepackaged goods (through panels and such; usually not to the end customer). Seems like restaurants are catching up.
I've also seen people test two ingredients, one cheap and one not. If their sample can't tell the difference, it flies. The problem is, we're each sensitive to different things. So while I may not notice the difference between a pricey and mid-range whisky, I will notice when you sub out the Chartreuse. Meanwhile, my neighbor will likely be the opposite. Rinse and repeat this process and you get the beige this process predictably produces.
> only change I saw was a growth of fine dining Korean food
I can count half a dozen on my block in Flatiron alone. The only Korean fine-dining place to have opened near me is Nōksu, and I'm a few blocks from Koreatown.
COVID killed a number of restaurants, but some, thrived. A couple of local sit-down restaurants switched to take-out only, fired all their waitstaff, and probably got a lot of financial assistance. They made out well.
A couple, never went back to in-house dining. They are still take-out only.
Doordash became huge around here (Ubereats, too). Pretty much every restaurant does them.
The prices have gone way up, for many of these places. A few places have doubled their prices, in just a few months.
Not sure of all the causes, or the long-term effects, but I am not seeing too many "Help Wanted" signs.
There are still more amazing places to eat in NYC than you could comfortably visit in a lifetime. I can't even keep up with the new places that open in my own neighborhood.
The platform fees and the insane menu price markups that restaurants apply for delivery app orders have made it impractical to use Uber Eats & DoorDash for a couple years now IMO. I only ever consider using them when offered at least 50% off.
Mandated minimum earnings will benefit the drivers, but that won't help drivers that have to quit the platforms because people stop using them.
> The only way it works is if someone else's time is an order of magnitude less valuable than yours.
Ish.
There's clearly a logistics problem here. 1-meal being delivered promptly on time scales poorly. But 15 meals delivered to 15 different people within 45 minutes is in fact, a net gain.
Alas, Doordash and Uber have gone about it in all the wrong ways. Its the drivers who double-book this process (ie: picking up more orders than they can handle), leading to inconsistent quality, cold food, late deliveries and more.
Its a legitimate model though. A more "proper" company that's doing this officially is Foodsby, where one Restaraunt makes a single delivery to 15-ish people in one trip at a designated time and location (usually within 5 minutes walking distance of an office complex. IE: One particular office building has a Foodsby drop-off point).
Everyone pays $2 each, the driver is happy, the restaraunt is happy (their personal staff deliver and therefore ensure quality food / hot food at the appropriate, predesignated time), and a ~5 minute walk for a bunch of office workers is a good idea anyway cause we're all sitting on our asses all day.
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It double-benefits because professional chefs like doing ~15 or 20 of the same order all at once, its more efficient for them... especially if they can plan such an order ahead of time (Foodsby isn't offered every day for a Restaraunt, they pick-and-choose the days that they'll offer the service).
So the chefs can cut-down on scheduling if they're burning out, or they can plan ahead and offer more days if they know some days are lulls / they have extra freetime.
Doordash / Grubhub / Uber is almost malicious for everyone involved. There's some ideas of convenience to some people, but its not good enough for the overall environment. In contrast, Foodsby (and hopefully more companies that adopt that model) has proven itself sustainable, at least in my area.
You are describing a completely different service though. Prep-meal delivery also works, but it's addressing a different usage pattern.
In the same way you could propose to replace Uber with... buses? 15 people get on the same bus at a specific time and get dropped off within 5 miles, thus optimizing the process.
I've seen the Uber drivers come in. They always grab like 4 or 5 orders, and possibly drive to a 2nd or 3rd restaraunt before they start delivering.
Its not like those UberEats drivers have a big penalty if they arrive late or if the food is cold.
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What I'm saying is, consolidated food delivery services is *already* what we have with DoorDash/UberEats/whatever, they just lie to you about the details.
The reason why Foodsby works (albeit on a smaller scale) is because they're honest about it. There's nothing wrong with consolidating orders to minimize driving time, the problem occurs because those other services _PRETEND_ they're a 1-to-1 order service with dedicated drivers. IE: Its the lies where things have gone wrong, not necessarily the practice.
If all the drivers are double-booking / consolidating orders anyway, then work it into the model. Embrace it, rather than pretend otherwise.
>I've seen the Uber drivers come in. They always grab like 4 or 5 orders [from the same restaurant], and possibly drive to a 2nd or 3rd restaurant before they start delivering.
Having done Doordash/Ubereats in the past myself that is ABSOUTELY not the norm, god I wish it was that streamlined. Picking up a single order and delivering it straight to the customer is by far and away the most common scenario for the drivers.
They do have stacked orders which are the multiple pickups you're talking about, but I've never had more than 3 orders "stacked" together, and I would say it's more common to have stacked orders from multiple different restaurants rather than multiple orders from the same restaurant. And from the driver point of view stacks suck because almost always only one order in the stack will have a tip, the others will be no-tip orders they couldn't get someone else to deliver by themselves.
Doordash also recently changed how they pay out on these stacked orders to the drivers detriment. It used to be you'd get the base rate for each order in the stack, so 3 orders stacked together would be the base rate x 3 + whatever tips by each customer, but now they pay them out as one big order no matter how many orders are stacked together, so you get a single count of the base rate even if you're delivering two or more orders in a stack, which again are usually only a single order with a tip, so you're effectively delivering the other orders for free.
Thanks for the anecdotes. Good to hear how things work from someone who has actually experienced it.
All I've seen are the big orders that get handed to someone who immediately runs out the door and into a car that they left running (with the keys in and everything), lol. They're obviously stressed and trying to make time.
I guess the big orders / stacks are more noticeable to me and obvious what's going on. If a more "normal" driver comes in, it looks like any other internet order (like my own, except I'm picking it up personally).
You are partially correct describing that some delivery drivers already batch their orders. But that's still a different use case. Foodsby can't scale to 15 min increments for all restaurants in the city. While some people can preplan and are OK ordering food from a specific restaurant that Foodsby works with, most people don't want that. How many people want to order food from an expensive Spanish (i.e. Spanish, not Mexican) restaurant I order from sometimes? So my options are going to be: #1 not ordering from this restaurant because it's not a common food preference and is expensive or #2 wait for 15 people to join the order for this restaurant and get food hours or days later.
It's a good business idea, it's just a different usage pattern. I order food when I am hungry. I don't preplan, don't like food from the majority of popular local places (pizza, Mexican, Chinese).
> Foodsby can't scale to 15 min increments for all restaurants in the city.
For some definition of increments and "all", yes they can.
Restaraunt#1 delivers at 10:15am.
Restaraunt#2 delivers at 10:30am.
Etc. etc. etc. Covering the entirety of lunch hours. This is how it works in practice, today.
If you're in a location with lots of Foodsby usage, then you might have 3 or 4 different Foodsby locations to check within a reasonable distance, which dramatically increases the restaurants and timeslots available. Like 1x Foodsby is already fine, but if you're in an area with 5x walking-distance Foodsby dropoff points like I am, things start to get really convenient, and the selection becomes dramatically wider.
It also means for the drivers, that one "trip" can hit 3, 4, 5 offices in one drive. I'm sure that on Foodsby days, these drivers are delivering multiple dozens of meals. In fact, the *MANAGER* of one local Restaurant was the driver for one of my recent orders (we recognize each other's faces because I visited his restaraunt a lot, so it surprised me to see the manager making delivery runs). So its more fulfilling work than typical grunt labor, since they're making so many deliveries on relatively low effort. If he's got ~30 orders, that's $60 ($2 per meal) in less than 30 minutes of driving/delivering, which is certainly more money flowing than most UberEats / DoorDash setups.
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Now yes, you may be arguing that "its not what you want". But... when that Spanish Restaraunt says "We're offering $2 delivery (no tip) 3 days from now at X-oclock"... I think you'll be thinking of using Foodsby that day.
Or maybe you check the website to see today's Restaraunts and whether or not your favorite is on the list.
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In any case, _THIS_ is innovation. Actually playing with models and finding things that are better for everyone (chefs, restaraunt owners, drivers, users) as a whole. I'm sure other models can work too, for some sliding scale of individualism, bulk deliveries and whatnot.
But as far as the personalized 1-to-1 service? Its dead, its so dead I'm convinced it never even existed. UberEats _never_ promised a driver on the standby ready to personally serve you, and months/years of using the service has made it obvious to everyone.
There's only so many times that I get a meal 1.5 hours too late that causes me to give up on UberEats (and similar) services.
Interestingly in Silicon Valley, there's an angel funded startup founded by an ex-Google foodie who worked with some of the more notable Asian restaurants (the super popular ones with long lines).
She arrange it such that users from a given neighborhood could order via the website app by 4:30 from a specific set of 2-3 restaurants per day. The orders from a given neighborhood are bulk ordered for 3-4 drivers to pick up from the 2-3 restaurants and delivered to the same neighborhood between 6-7pm.
The list of 2-3 restaurants for a given neighborhood are shared a week in advance and in cooperation with the restaurants so they can handle the surge. Since the restaurants no it will likely be reheated the packaging is optimized.
Because there is a rotation of the restaurant - it paradoxically avoids the tyranny of choice issues with picking a restaurant and actually feels fresher in a discover new restaurants type of way.
During ZIRP/Covid the menu prices were sometimes lower and there was no delivery fee. Post Covid they do have a membership option or a very modest delivery fee.
Hello, what is the name of this? I am currently working with a few restaurants to launch almost the exact model. The idea is to transition from on-demand to in-advance.
Uber was experimenting with that exact process before covid. For a lower fare, you let Uber dynamically re-route your driver to pick up more people headed in roughly the same direction as you. Worked alright, maybe took 1.5x as long for you to reach your destination while you paid about half as much as you did usually.
Busses work, though. If you removed busses, there is no amount of Ubers you could add to the roads to "fix" the system. It's clearly impractical for each office worker to pay for even half an hour of someone's time every day to deliver a meal just to them. While most counter services can serve 20 meals with the same half hour of wages.
Uber Eats is doing it here in London with "ghost kitchens". 15 fast casual brands cooking (mostly reheating really) from 3 kitchens in 1 building. A much better chance for delivery drivers to be able to pick up multiple orders. It still isn't enough optimising though, as the destinations are still scattered.
I spent a number of years working at a pizza place in high school/college and on busy nights they had a dedicated "router", a human who was sometimes also a driver, who grouped orders together so they got where they needed to go in a timely fashion and the food was always warm.
When I order DoorDash my driver either only has my order or they have a secondary delivery that is insanely out of the way. This is a very inefficient use of driver time.
The pizza place is practically all delivery and it's easy to bunch up the orders heading in the same direction. Comparing that to UE/DD, a single restaurant might have 2-3 delivery orders at any given time, but what are the odds they are all headed in the same direction? I wonder if extreme density cities have less of a problem with this.
For reference, I live in a "2nd tier" city. Not NY/LA, but a city everyone has heard of.
On an unrelated note, I've always thought the big problem is their market is too narrow. These companies should deliver literally anything that can fit in a passenger car. One example I know of is that auto shops do not keep parts for every car in the shop all the time. They contract out to parts warehouses. Those warehouses have employees which deliver your new carburetor to the auto shop that's installing it. There's no reason your Uber driver can't pick up pasta and a carburetor.
> On an unrelated note, I've always thought the big problem is their market is too narrow. These companies should deliver literally anything that can fit in a passenger car. One example I know of is that auto shops do not keep parts for every car in the shop all the time. They contract out to parts warehouses. Those warehouses have employees which deliver your new carburetor to the auto shop that's installing it. There's no reason your Uber driver can't pick up pasta and a carburetor.
Looking at the Uber app, under Delivery > Services it actually looks like they do purport to offer delivery for basically anything. Groceries, Alcohol, Pharmacy, Flowers etc. I have never once tried it or met anyone who has. Maybe I'll give it a shot tho.
>The only way it works is if someone else's time is an order of magnitude less valuable than yours.
Targeting mainly the wealthy isn't necessarily a bad business strategy.
It should also be noted that it's also useful for bulk order to people and those unable to physically move themselves to a place (disability, lack of car, etc). It's not a "use everyday" mechanism, but it has uses.
Indeed, the only way it is working right now is because a significant piece of their revenue is from discounted gift cards so their revenue grows while taking a loss. In the future, they will have to replace the driver with something automated if they want to make money.
>It takes 10 minutes for a chef to make my meal, and 25 minutes for someone to come to the restaurant, pick it up, and drive it to my house.
And in that 25 minutes, the food has gotten cold and its chemistry has changed too. You could reheat it in the microwave, but now it'll just taste like reheated leftovers.
> The only way it works is if someone else's time is an order of magnitude less valuable than yours.
Food delivery also seems to work with vertically integrated geo-segmented services like pizza and Chinese takeout. My best guess is that the profit margin and delivery packing are high enough to make it worthwhile.
I wish there were Indian curry vans instead of ice cream vans, driving around the streets playing distinctive music from 5-8pm. Group buy discounts for individual streets to promote pre-purchase, etc. Do a different suburb each night of the week. Please someone make this.
Most of my favorite local restaurants use other platforms now. It's been 3 years since I've last used Uber or DD. If they don't deliver, I just go pick it up myself.
Food delivery existed before platforms, but only where it made sense. You could order something like a pizza, where the marginal cost and effort required to make another meal was low, and the sales volume was high enough to justify using paid employees for delivery. Service area was also chosen by the restaurant itself to ensure that they would not spend too much time on a single delivery.
In the end, it's pretty simple. How many deliveries does a single person make in an hour, including idle time? Is someone paying enough for that? And does the kitchen have enough spare capacity for that?
> Food delivery existed before platforms, but only where it made sense.
This article is about NYC, where food delivery was ubiquitous long before DoorDash. In fact, Seamless in 2010 was a better experience than Doordash is in 2023, when you consider the absurd markup on Doordash.
Doordash struggled to enter the NYC market for a while because it was trying to compete with an established product, yet using a higher price point. It was only with massive amounts of VC funding that they were able to get a foothold.
>The basic concept of food delivery existed long before tech and VC and was viable.
In limited markets, for specific types of food, and for pretty crappy wages for the delivery people. (And, yes, for mostly pretty low tech approaches.)
These companies have spent a ton of money to convince lawmakers and consumers that they are not in the food delivery (or taxi) business. The whole plan was to not have to deal with these pesky regulations.
In NYC, before Seamless and the like, restaurants just offered free delivery when you called over the phone. It was just part of the deal; didn't have to be profitable on its own (the business it brought was enough). Restaurants evidently did fine back then.
Seamless et al are really just siphoning money out of restaurants’ pockets because you cannot, these days, be the only restaurant who still makes people call over the phone.
Not sure why you got downvoted, its true. These platforms are all a race to the bottom to capture market share and then jack up of prices to recover lost revenue. Overall, it ends up being a terrible experience for the customer and the driver/deliverer.
Because it’s not true anymore, and complaining about high prices for a service that is just moving up market kind of ignores the reality that a business can make fewer sales if its margins on the remaining sales are sufficiently high, which is exactly what has happened.
In other words, delivery apps went through the “burn vc money” phase already, and are now focusing on profitability, and successfully so.
Food delivery products and companies are definitely not moving up market. Valuations have plummeted and many are still struggling to turn a profit despite layoffs and cutbacks.
I'm curious; what do you think "moving up market" means? Does it mean "becoming a company that has a higher market cap and/or is more profitable" or does it mean, "Targeting a wealthier customer"?
Because what you've listed would suggest you believe it means the former, which isn't accurate (it's the latter). Maybe I misunderstand, though.
I think food delivery at scale is unprofitable, at this point the technology in those apps doesn’t really have a moat. The next logical big step is to have drones delivering the stuff, and at that point you have this massive amount of tech and research to get food 2 miles down the street…it seems pretty counterproductive.
Not sure where you folks live but all the major ordering apps present in Toronto have been excellent in the suburbs. I was fully satisfied at least 9 out of 10 times.
And even the most expensive, ubereats is only, at most, a 20% surcharge compared to the in-restaurant price plus tip, for a $50 order.
I live near Mountain View, California and its probably sampling bias but i would swear that for the entirety of pandemic there were complaints about food delivery missteps and prices on my Nextdoor neighborhood.
How does the customer have a terrible experience? I order delivery more often than is reasonable across many different platforms and I usually have a perfectly fine experience.
Because I put it a 9$ burrito in the cart and somehow at checkout the price ends up being 25$ before tip. The only way I use those apps is if I have really good incentives/discounts…so maybe I am not the target market, happy to eat in or not order at all. I have not had any problems with the delivery people, they are always super nice.
I've never really gotten this. We can speculate about the intelligence of VCs, but I assume most of them know a bit of basic math. I wonder if perhaps they are so deep into a bubble of wealth and privilege that to them, spending $50 for a (cold by the time it arrives) burger seemed reasonable. Perhaps they thought that once everyone could experience this for an amount of money they find trifling, it would catch on?
I've used these services a time or two just to see what the fuss is about and I don't get it myself.
The VCs are hoping to hype the product enough in the early stage to achieve a lucrative exit, and do that 10% of the time(or whatever). What happens with the product once the company is public is not of their concern.
>I've used these services a time or two just to see what the fuss is about and I don't get it myself.
It's similar to fast food itself. convenient and cheap. these days the latter is falling off the wayside (again, just like modern fast food). It was invaluable during a pandemic to help encourage social distancing, but even if it was still cheap it was bound to fall off a bit (probably not to pre-pandemic levels, but no longer record customers).
>I wonder if perhaps they are so deep into a bubble of wealth and privilege that to them, spending $50 for a (cold by the time it arrives) burger seemed reasonable.
As others have mentioned, it's more a matter that VC's aren't necessarily looking to be the next big tech company. Many are looking for a profitable IPO and then move on to the next company. Lots of problems with enabling that model to begin with, but that's a whole other bucket of worms.
They work kind of OK in dense expensive cities like SF or NYC where people don't drive as much. Less so in other sparse areas where driving and picking up or even eating out is less of a hassle. I think you're using $50 as hyperbole; more realistically, a $20 takeout becomes $30 with delivery, and a lot of people seem to be OK with that.
Which if I recall correctly they are only profitable due to a one time revenue boost right of something like hundreds of millions ?
And that one time "revenue" boost was that a company they own they are asserting is now valued more than last year. And they are calling that "revenue".
I took a look at a fool article. If you exclude the unrealized return from an investment they made, their profit are in the single digit millions. Not really confidence inspiring, but maybe I am wrong and that they could indeed make their business sustainable.
It implies that their margin is really low. We're talking about revenues in hundred of millions and they're only able to make single digit millions.
Next quarter, their margin might entirely be wiped out by a slight downturn in business. If they could increase their margin and make profit consistently, then I'll change my mind.
Is a particularly big percentage of their costs fixed? Because that affects the math a lot. If we consider a generic slightly-profitable company facing a 25% revenue drop, there's a huge gulf between a world where costs drop 10% and a world where costs drop 22%.
>One of the pre-requisites for that is being profitable on a GAAP basis.
Uber lost money for 22 straight quarters, then made money for the last two. Bit optimistic to think it's smooth sailing from here, in my opinion. I enjoy Uber, the product, but they are middle manning a couple of low margin industries. Hard to imagine it being a multi-hundred-billion dollar company.
> That's a somewhat outdated narrative to still be parroting.
It's not. Most of those "innovators" are still posting losses in the hundreds of millions
> Uber just got included into the SP 500. One of the pre-requisites for that is being profitable on a GAAP basis.
Because you can somehow lose a billion dollars a year for 10 years, become a publicly traded company with a steatement "we don't even know if we'll ever turn a profit", still continue operating at a huge loss for several years, write off 6 billion in losses, and finally become profitable enough to be included in S&P.
Any any other, sane world, Uber would be gone after two years of losing a billion dollars a year. Not crawl into S&P after 10 years of unsustainable losses.
> it seems as if Uber’s losses were self-evidently sustainable.
With the unlimited free investor money. Same goes for the rest of "amazing starup innovators" of recent years (e.g. YCombinator's startups). The flow of money has now stopped/slowed, and we now see mass layoffs and a wave of bankrupcies.
Losing a billion dollars a year for 10 years is not a sustainable business. But somehow it has become the norm in IT.
I mean I think it can be, given that there's a $20-$30 markup per order, but it definitely requires some particular circumstances.
The bigger thing is that if you're thinking of Lean manufacturing principles or Theory of Constraints, where the goal is to get the noise out of the system, you would never maximize a business the way that Uber Eats and Doordash are. It'd instead be something like the following pipe dream:
- We sell "pizza delivery as a service" to businesses who want it -- at first we're trying to partner with Target and Walmart, etc. Our value proposition to them is "hey Amazon is eating you alive, how about we help you offer ultra-rapid delivery and the people you're working with basically become fellow trusted Target employees?" (Of course, we'd be happy to double-dip -- ideally we'd convince Amazon that we're a cheaper way to reach their customers than their own delivery drivers. But that's a really hard sell.)
- The company rents delivery people from us per day, we provide the delivery network. If you need to "burst" we can provide extra folks to augment at a premium. Ideally someday we'll get some lucrative Amazon contract where the Amazon warehouse, but to start with we're doing laundry delivery and other odd jobs. The company maintains their brand; we're just a courier service. You don't go to the FedEx website to order something, you select FedEx at the end with "how would you like this to come to you."
- On the side, we do sell a service of "we will give you a new pickup/delivery portal web site that works with our delivery service" to smaller businesses so that they can get started with us.
- We are a courier service but we only operate in cities where we can sufficiently average out the volumes needed. Amazon, UPS, FedEx can be the kings of the countryside, that's fine.
- The company, assuming food, sends their delivery-person right when the food is cooked, they are our employee and package it to our standards and bring it straight out to our delivery hub. In general they will not be going to the final address. We use this as a process buffer to maximize our throughput for the people actually driving to the home addresses, we can make sure that certain people get to know neighborhood X better, etc.
- The shipping price should come in two tiers, give people a generous shipping discount for advance orders where we can have more opportunity to batch and optimize.
- Because the company pays us (and the user pays them for "shipping"), under no circumstance does the user tip; that workflow is just too indirect to sustain tipping.
- Which means we have to do a 180 on how we treat the delivery folks; ideally they'd be full-time employees and we'd proactively unionize them.
That last bit sounds like suicide but really there's a ton of noise in terms of all of this "well the question of who are our delivery people is fraught, they can drop off the map at any time" and it's like, no, I want to be able to say at the central hub, "here's the route you're about to follow, review it while you wait 2 more minutes for Tina to arrive with order 6AF12B, that's your third one, we've got the motor running for you and you know these streets better than anybody," and under no circumstance is that person saying "eh, I have a party I want to go check out, I'm just going to go with these 2 orders and leave Tina in the lurch." And, we can sell it to city-goers as "this is the ethical way to deliver, the union makes sure that we maintain the cars and that we pay as well as we can."
And the rest of it is making the profit back up in volume.
FWIW, the people that order food regularly don't care that they are paying an exorbitant fee for it, and there are plenty of them. The folks that don't regularly order may order less, but that's not going to really have a significant impact on the business overall.
It's 50% off the base price, which excludes the delivery fee, the convenience fee, the inconvenience fee, the COVID recovery charge, the Livable Wage surcharge etc.
The last time I ordered UberEats, all the fees plus tip nearly doubled the cost of my order.
> With the changes required by NYC and the impact it will have on our system, we are pausing our Priority Access program, which gives Dashers who have high ratings priority on higher-paying offers. Since Dashers will earn a guaranteed minimum rate, the benefits offered by this program will not apply in NYC. The Top Dasher program is still available for qualified NYC Dashers.
So they're guaranteeing higher pay for all workers, and cutting a benefit for their best workers? I wonder what kind of impact this will have. Will this encourage some of these top workers to leave the platform, since they can no longer get access to good orders based on their track record?
"High ratings" means you don't reject offers from Door Dash. Meaning if you get a $2 untipped order to deliver 10 miles away, you accept it. Each rejection hits your "Acceptance rating".
It was a marketing ploy to trick people into losing money delivering. Because Door Dash can't force people to tip, someone has to take the financially bad orders.
Trust me when I say, being in those high echelons isn't worth it for a driver. Everyone will be happier with this. Getting a higher rating priority usually means that you lost money, and are just planning to be dashing a ton at a lower quality the next month to offset it. You have to purposefully accept untipped orders at bad ROI restaurants to achieve those numbers.
Outside rush hour there's already not enough work in the sense that there will be long periods of waiting for orders in even very large cities. It seems like if anything they could afford to raise standards for the consumer by offering less to lower performing drivers to make contracting unappealing.
Rising tide lifts all ships. Maybe we'd get better overall throughput and less saturation, though I see where you're coming from. The tips might help no?
I read an interesting article about delivery drivers in NYC, specifically how much of the market was completely unregulated and illegal, and how people work within what functions as an underground economy:
The person doing the work often isn't the person registered with (e.g.) DoorDash. There's a whole economy of middlemen who resell straw buyers' credentials/accounts.
This obviously happens with Uber also, and to some extent AirBnB. A lot of "super" hosts have someone completely different manage the listing and the host is really just a brand for the listing page at that point.
This seems to be the case in bay area too. The person delivering the food is not the same person in the DoorDash app. It used to be rare before but not anymore. (sample size of 1, as recent as 2 days ago).
In New York City five years ago I was switching from one IT career to another (Unix sysadmin to programmer), and was working part-time for a very small startup that had run out out of seed money, while interviewing for more lucrative positions (which I found four years ago). The founders were working a day job, and funding me out of pocket, which was to the tune of $100 a month. For a variety of reasons I decided to do Postmates deliveries, one reason being the flexibility.
Running around Manhattan on cold November nights five years ago, I began to appreciate the $100 a month I was getting programming for this small startup at my desk at home or in their co-working space. If you don't have a bicycle or car, you pretty much need a metro-card, which goes to your expenses. Sometimes orders came in right away, sometimes I'd be sitting around for over 20 minutes waiting for one. The food pickup location was always within half a mile of my location. The quickest pickup offer to delivery for me was 23 minutes, longest was 52 minutes. With waits of up to half an hour before a next offer.
Deliveries usually paid a little over $4, but there were bonuses of $2 for some deliveries, and you'd be paid for long distances or long waits for food. You would also get tips (up to $7).
As I said, I was getting paid $100 a month to do some programming for a small startup, which seemed very little, but it was a lot easier than how much time and effort it took running around Manhattan to earn $100 from Postmates.
About six months after doing occasional Postmates deliveries I was making over $60 an hour programming for a multi-national.
> Dashers who deliver in NYC will now earn at least $29.93 per hour of active time, nearly twice NYC’s $15 minimum wage for other workers.
What’s a realistic amount of “active time” per hour? I’m assuming waiting for a job is not active time right?
> These new regulations will force us to raise fees for orders in New York City. In order to better balance the impact of these new costs, we’re moving the option to tip in the DoorDash app to after checkout.
So hiding the tip until after closing the sale to pretend the total price is cheaper? Very classy.
What’s funny is that the tip should come after the service is complete if it’s actually a tip for good service (otherwise how did you know what service you got?). But they’re clearly just trying to hide the true price.
I think you're misunderstanding the change to tipping. DoorDash is effectively eliminating it (or at least making it truly optional). The city's study [1] advocates for this explicitly:
> Beyond productivity, there also exist several other margins for adjustment to higher delivery worker pay. For instance, apps could choose to reduce consumers’ costs through changes to the user interface that discourage or eliminate tipping (or, equivalently, consumers could choose to tip less in light of workers’ higher pay, independent of any changes engineered by apps). The Department finds that if tipping were eliminated at all apps, costs to consumers would increase by $1.06 per delivery (3%) with workers still receiving sizable pay increases.
Basically, the previously "mandatory" tip is now baked into the price upfront. I think this exactly what you want.
> DoorDash is effectively eliminating it (or at least making it truly optional)
it was truly optional before, no? you just had to decide if you were taking an option or implicitly being a jerk before ordering. now you decide after.
perhaps companies need to stop implying such things altogether. such as could be done by not even mentioning a tip until food is in hand. as that is what a tip is.
that the delivery person be paid more upfront and outside of tips is part of the problem that needs solved. a big part, but not the only one.
in fact the case study advocates for more than dd did.
so this doesn’t seem to be what the commenter wanted. progress but not completion. maybe not time to celebrate yet.
The big difference is that before, the tip you picked before placing the order directly reflected the offers that the dashers would see. If you put no tip then very few dashers would be willing to take the order. This is what effectively made it mandatory.
Now dashers won't see tip variance in offers, it'll effectively be post-service from their perspective.
From the consumer perspective, yes, you can tip before you have the food in hand, but it's no different than if you had gone back after delivery and added a tip.
I don't really see what your remaining point of contention is here.
> From the consumer perspective, yes, you can tip before you have the food in hand, but it's no different than if you had gone back after delivery and added a tip.
When you visit a restaurant, do you give a tip to the wait staff when you place your order or do you wait until after the service has been rendered?
Generally I don't have a choice as you tip when money is exchanged. At some places that means when you place the order (but before you've gotten the food), and at others it means when the bill is satisfied at the end of the meal. Other times the tip is forced so you don't really have a choice regardless (unless you want to go above the mandatory amount).
However, the change with DoorDash is now it doesn't really matter when consumers decide to tip since it won't be known to the service provider (well, I suppose DoorDash themselves know, but the dasher does not). Previously the tip impacted the offers dashers saw, so opting to tip after service would impact the service being provided.
> What’s funny is that the tip should come after the service is complete if it’s actually a tip for good service (otherwise how did you know what service you got?). But they’re clearly just trying to hide the true price.
This. I had a recent order with a "SkipTheDishes". It was a semi-big order, and I left the default tip in place, which was over $20 for a 5-10 minute drive. The driver did a few other deliveries on the way, so when I got my meal it was only vaguely warm. Certainly not worth $20, and enabled by the company as they have a mechanism for a driver to take multiple orders at once.
It seems like that's the point of the story -- they were willing to tip well, and received bad service. If it came after, then drivers would have a reason to make sure food was delivered fast and efficiently.
Yeah, the way it's setup, with the delivery company on board with stacking deliveries, and no guarantee of good service despite a good tip, there's no incentive to tip at all.
I think it should be illegal to ask for a variable tip before a service is substantially completed. Go ahead and charge a fixed gratuity, but prepaying tips is silly.
It definitely shouldn't be unlawful for the service provider to ask prior to completing the service but I really wish more people would see it as distasteful, as seemingly most forms of drip pricing are considered. Obviously the tip is for exceptionally good service; if it's baked into the sale price then it's just another form of drip pricing.
I wouldn't burden the service provider, I would burden the payment processor and card network. If there’s a license involved, even better. Some merchant codes can’t have tips, merchant onboarding can’t have tip upselling by the sales team
Regulate behavior by regulating the intermediary
Think about anything this way and you can push the same changes through any form of government
I would add: especially when using apps or food delivery of any kind.
The chances of a server spitting in my food for me leaving a bad tip after a meal in a restaurant are 0%. The chances of someone mucking with my food because I tipped $1 on a $40 order are absolutely >0%.
> The chances of someone mucking with my food because I tipped $1 on a $40 order are absolutely >0%.
More realistically, you'd just never get your food.
Drivers have the option to reject low-paying deliveries, and they absolutely will. I've heard of restaurants having a "wall of shame" of food that's been ordered and prepared, but is consistently getting rejected by drivers.
Eventually it'll land on a driver that is truly desperate or is just starting for DoorDash and wants to get some good reviews. Unfortunately, they'll deliver cold food that's been sitting on the Wall of Shame for half an hour and the customer will blame the driver for it.
It works as a bid but only up to a certain amount, above which Dasher just shows the offer with e.g. "$6+ tip", hiding the full tip amount until after the order is delivered.
Out of curiosity, do you happen to know whether the threshold for hiding the full tip amount is based on a percentage of the total order cost or if it is just a flat number? I.e., “anything over $6 gets truncated to $6+” vs. “anything over 20% of the order gets truncated to ${total_order_cost*0.2}+”.
Or could it be based off the 3 pre-selected options for the tip that are displayed at the checkout page, and if it is more than the largest option, then it just shows `${largest_predefined_tip_option}+ `?
My personal guess is that it is the last one, but that’s just pure speculation on my part here, hence the question.
So, it has changed over the years, but it used to be {roof(basePay + $5, floor(mileage) * 2)} so with the $3.50 base pay of the day, anything under 5 miles had a max showing of $8.50, and then anything over would be like, $10+. It still roughly works that way, but the constants change
It seems to be one of several fixed, round numbers depending on the market (city). But there may be other factors. It's an interesting policy choice and I'm curious why they do it. Needless to say, drivers very much want to know the whole tip amount and are annoyed that the displayed value is capped.
Keep in mind that in NYC tips are exempt from sales tax, but bids for services are not. So customers would pay 8.875% more if DoorDash stopped pretending the payments are tips.
I know they want to control pricing, obfuscate things, take advantage, extract surpluses etc., etc., but the 'two-sided market' thing would be way more convincing with real legible price discovery. Let people that want their food _now_ throw in an extra $20 for the privilege. If someone in Long Beach wants something from SGV, let them pay whatever it takes to get someone to get someone to drive two hours. Give Dashers tools to build auto-bidding strategies that align with their preferences. Show people ordering what similar trips cost recently. This doesn't have to be an awful dystopic extractive system...
It's only the time between accepting a delivery and finishing it. Time spent waiting for a new delivery offer is not paid.
> After a few minutes of waiting, you are offered and accept an order and drive 10 minutes to get to the restaurant. You wait 5 minutes at the restaurant, then drive another 15 minutes to deliver the order.
> In this example, you spent 30 minutes actively on the delivery, which includes the drive to the restaurant, the wait at the restaurant, and the drive to drop off the order.
Waiting time for the next order is the same distribution for each one of them. So to minimize the number of pay gaps in a day, you will want to stretch out each delivery as long as possible.
If you are a true believer in the impossibility of good service in the absence of heavily tip-based pay, you set up incentives like this and your belief system won't ever be challenged.
I think they're hiding the tip after the talk about drivers shopping for tips. As I understand it, before you would tip up front, and so the drivers knew which orders would have better tips.
Letting the customer tip after the order has been received lets the customer evaluate, and tip, the overall actual service. And prevents drivers from prioritizing those orders with better tips.
I did a quick search and it appears the law sets a minimum of about $20 per hour. So I guess DoorDash considers there to be about 40 minutes of "active time" per hour?
That seems to "match" what I quickly saw. I'm in no way an expert on this, but I did some quick spot checking of what I could find online. From 5-10 screenshots I saw of people's earnings drivers seem to have about 70% or 75% of "dashing time" as active time.
There were exceptions I also saw, someone at 50%, some other people said they were at ~90% although I didn't see screenshots.
I assume this varies heavily by if your in a city or not or how close to meal time it is which I've got no insight into.
And note this could be all entirely wrong - it's people who chose to post their screenshots online so huge risk for selection bias to it being higher paid workers.
What law are you referring to, and a minimum of $20 per hour for what? Wouldn't your interpretation mean I can sign up for DoorDash, keep the app open, never accept a delivery, and be guaranteed $20/hr?
I don't know, but presumably OP is referring to a $20min wage as covering active time, not "dashing" time. The latter means you have the app open and are scheduled to work. Active means you are actively driving to a restaurant, picking up food or dropping it off.
So if you schedule two hours and the app give you no hits, or you decline hits that time wouldn't count.
Now that said, I know nothing about the $20 min wage and can't say if that's accurate or not.
That states they can choose hourly minimum or "or pay per delivery at about 50 cents a minute" which is in line with $29.93 per hour for what DoorDash calls "active" work.
Dashed for 3 years, it's highly variable. I probably averaged 50% or less tbh. Also, un-tipped orders are weighted more into the pay-by-time in my experience, since you can't say no. It also means you can't avoid slow/bad restaurants, or unsafe/low-tipping neighborhoods.
So, I did doordash for three years during the pandemic, working through college. In that time. I received 5 tips post-delivery, out of nearly 2000 deliveries. It was so uncommon that I remember all of them. At the same time, regardless of distance or time, DoorDash would only offer $2-$3.50 per delivery. So yes, if you didn't tip up-front, I was unlikely to take your delivery after I ealized that. My rule of thumb was no less than $5, and $2/mile, decreasing to $1/mile with a long enough distance. Otherwise, between maintenance and gas, I was losing money. I only broke that rule if my numbers were too low. They implemented this style of pay shortly before I left the service, but in my experience, it paid nowhere near well enough to be worthwhile.
Tipping is a cultural convention. You don't tip for service, you tip because it is our custom. You don't have to tip, but then you risk backlash for violating social norms. If you really like the service, you can tip extra. If not, you can give a low rating or and/or write a negative review and/or not patronize them again.
In the UK with Uber Eats/Deliveroo you can select a tip when you order and then you can modify the tip up to a short time after the order. So you can just put no tip and then add one after delivery if it’s good service, or increase/decrease it. Is that not how it works with DoorDash?
Ah, AFAIK the tip is hidden for the UK services. They’re also batched so the driver can’t know who tipped/what tip an individual order gave them. It sounds silly to show a tip on the order that can then change later.
Not with DoorDash, drivers recieve the tip no matter what. If you talk to support and get your tip refunded (for poor service or something), DD eats the cost.
> Tip baiting is when customers enter a certain tip amount when they order their food or groceries on a food delivery app like Uber Eats, DoorDash, Grubhub or Instacart and then lower the amount or remove the tip entirely after they have gotten their delivery.
I'm not totally sure. There isn't a mechanism in the app to remove a tip as a customer. Drivers on DD-related subreddits say it isn't possible for a tip to be taken back.
DoorDash sent out an email yesterday informing customers of the changes. They only mentioned that tipping was moving to after the checkout step, but nothing else. I simultaneously decided to stop ordering DoorDash yesterday; I've been gaining too much weight recently and spending too much money.
They can keep it. I refuse to bribe someone to deliver my food with a tip, before. I'm not even going to get into when a driver eats the meal, you have zero recourse, in practical terms.
I'm done with companies not only charging more, but requiring that I assist them AGAIN with payroll.
The NYC report is interesting but also very problematic.
The justification of the minimum pay over NYC minimum wage is a mixture of reasonable (DoorDash not paying employee taxes, worker costs) and ... creative (like rolling in cost of living adjustments to minimum wage just because you can).
More importantly:
> First, the model assumes that, from 2023 to 2025, apps will respond to the minimum pay rate by increasing deliveries per hour worked from the current 1.63 to 2.50. This assumption is based on the Department’s identification, using the record-level data obtained from apps, of large differences between apps in the number of deliveries per hour.
Their "model" is making HUGE assumptions about the apps being able to "innovate" in NY, based on data coming from their own black-box reported numbers. And nearly all of calculations about how the pricing, cost to businesses, customer price sensitivity, and take-home pay of the workers is entirely based on very flimsy projections.
I have no problem if NY wants to level the playing field between employees and contractors so that apps have to pay fair. But they are taking things one step further just because they have the mandate to do so. And there's no way that the people setting policy based on these arbitrary numbers are ever going to be held accountable for them.
"Tips" were effectively bids for service under the old model, as they were paid before the service was performed and determined whether a driver felt it worthwhile to accept that order. Now DoorDash will have to dynamically figure out how much to charge the customer to both interest drivers and meet this minimum pay requirement. I'm interested in seeing how it turns out.
The press release says they're paid "after checkout". I assume that that means immediately after payment of what appeared to be the price, but still before receipt.
I personally feel like outsourced delivery for hot food orders at peak hours is a flawed idea. I've used Grubhub and it seems like they try to group deliveries. In my situation, I had a driver pick up my food only to drive it around down and deliver it to me 40 minutes later. If I order from a place and they don't have a driver on staff, I won't order delivery.
In NYC delivery is too good. I'd say 20-40 minutes about 90% of the time. I'll even order fried food and know it will still be crispy!
I used to live in downtown SF, which is one of the densest urban areas in the US outside of NY, and I would only reluctantly order delivery because the average wait was closer to 75 minutes. I'd wait 1.5 hrs before checking on the order. Food reliably showed up cold.
Yeah, stacked orders are a joke. From DD-related subreddits, it seems the algo typically bundles low tip orders with higher tipping orders. This is so the low tippers finally get their stuff delivered because no one else was taking it individually.
The problem isn't that they group orders, it's that you weren't aware of it and weren't given the choice. You were made to believe that you were paying for a direct order and it's only after the fact you realize but by then it's too late and getting your money back is a hassle. There would be no problems if you were given the choice upfront to pay less for a grouped order or more for a direct order.
The problem is that these companies need to somehow pay for all that "growth & engagement" and so have insane overheads, so being upfront about the costs will mean they'd get no business, so instead they obfuscate it as much as possible like in the above scenario or outright steal drivers' tips.
Yeah, I mean, as I mentioned, I'm willing to order rolling the dice but once my order is picked up, they should do the right thing and be transparent. They have my money already and as you said, I now have the expectation that "I'm next".
Seems insane that people living in inner cities need to get food delivered. Unless there is a good reason you are handicapped etc. or maybe just had a baby. But for most people routine delivery when you can walk 5 minutes and phone ahead that order is fine.
Also health. The idea thing to do is cook the food: cooking the food esp. chopping etc. I feel is good for mental health and prepare the body to digest. And you have moved somewhat. At least if you go pick up the takeaway, you have done some walking. If you are too busy to do physical things in day to day life, so you can crank out another page of code, or do a deal, I think that is poor and leads to bad health in the long term.
Sure, but overall regular alcohol use categorically leads to a more miserable life. There are no free lunch drugs, maybe except exercise. Alcohol culture though is crazy strong, probably an example of a naked emperor.
I feel like the only viable model for these delivery apps is delivery with autonomous vehicles like Nuro (or any other, this is just the company I have heard of). Whether that’s actually viable and how soon, I have no idea, but the model as it stands does not work currently.
A whole lot of people will lose income (no matter how mediocre) if this were to come to fruition though.
In New York, there is imply not enough space on the roads for autonomous vehicles to work for this purpose. Delivery only works now because delivery drivers all use bikes, e-bikes, and mopeds, which are immune to traffic.
It's not just any job though. Food delivery is amongst the lowest skilled jobs, while research is amongst the highest. Also, good for you that you lived super well
But not everyone is comfortable living with 5 roommates.
That's "active work" though. So you're also going to be spending a lot of extra time sitting in your car waiting for delivery offers to come in. Outside of lunch and dinner hours, you'll probably be spending an equal amount of time idle as you are "active" according to DD.
But that 25 active hours per week requires about 50 hours of working. You're just not paid for the 25 hours where you are waiting for an offer to come in. There's only about 3 hours per day when you can consistently get an offer within minutes of finishing one.
And don't forget DoorDash doesn't pay for gas or other required maintenance from the extra use on your car.
Interested in how they count hours - are the only hours counted the hours where you are actively picking up / delivering an order? Or are employees also compensated for time spent waiting/looking for orders?
> As always, 100% of a consumer’s tip goes to the Dasher.
“As always” is a lie. Moving the tip prompt to after checkout is far more consequential than they’re admitting.
Previously, the way it worked was that you could tip $0 and they would compensate by steadily increasing their offer for the job until a dasher accepted it. This essentially meant that pre-checkout “tips” were bonus money for DoorDash, not the workers. It sounds like that scam is finally going away. No wonder they refer to the regulatory changes as “bad policies”. This is coming in other major markets and they know it.
I quit using all those services due to the menu markup, service fees, and then the tipping shit ball topper.
If I'm using I service for the express purpose of delivery, and paying a premium for it, I don't need a culture of expected tipping on top. I miss the days of Uber baking supply/demand pricing and that was the end of it.
Do other people in NYC use Doordash? Curious to understand people who do.
Anecdotally, I never have even considered it – although it's true that I'm somebody who prefers choosing my own groceries.
I feel like the value prop (i.e. value less [opportunity] costs) is de minimis to most in NYC, with abundant grocers and restaurants at every price point.
Yeah but then you have to leave your home. I know people who use it plenty because they're too lazy or busy (the person I know who uses it most is in med school and has basically no life currently except for studying and school).
I use it when I'm too sick to leave home and I'm not stocked up on food. Or board game nights when we don't want someone to have to leave to pick up food. All the delivery apps have such bad customer experience though, we usually now just agree on food beforehand and have one person pick it up on their way.
Absolutely blows my mind the kind of money people will spend to avoid 10 minutes of driving.
Even now that I am making substantially more money, pretty much Doordash's prime demographic, I find it such a terrible deal that I simply cannot bring myself to use it.
It varies by app and they obfuscate the numbers by calling some things delivery fees and others service charges, etc. And they highly incentivize you to subscribe for $10/month to get rid of most of those fees.
If you subscribe, you'll pay about $3-$6 in fees (factoring in the subscription cost).
Without a subscription, more like $5-$9.
Some restaurants will charge even higher delivery fees, like a flat $5 or $10 on top of the app fees, but they are the minority.
And then there is the tip, which everyone does differently, but I think/hope most people tip at least $3. I consider $4-$6 to be a good range, though I can't explain why. Some apps encourage bigger tipping with their presets, including percentage tipping (like 10%, 15%, 20%), which could easily be $15 or more if it's from an expensive place.
Overall, I'd estimate that most deliveries for 1-2 people cost from $6-$15 in fees + tips. I pay about $8 per delivery based on my ordering and tipping habits.
I worked in this industry and I know for a fact that if you don't include tipping in the checkout flow, tips will drop precipitously. But if drivers are being paid $30/hr, it's fair to drop tipping altogether. I would love for the US to eschew tipping culture like other countries and just pay a wage that is transparent.
There was a lot of backlash when it was revealed DoorDash was taking tips like the method you stated. Now they give the entire tip to the driver regardless of minimum pay.
OP was making a joke that no, it's not "as always" because there wqs a pretty large scandal just a few years ago centered around DoorDash not paying 100% of tips.
so my understanding is: don't tip on doordash after this. This means that the actual cost will be included in the work. I'm all for it. I hate tips, it is arbitrary and terrible.
> They used tips (and may still use tips) to refund themselves for the minimum pay offered to dashers.
Not trying to make a stance one way or another, just wanted to make sure I understand what you meant by this correctly.
Is what you are describing essentially the same way it works in the restaurant industry for waiters/servers?
TLDR: waiters/servers in the US typically have a base pay that’s below the minimum wage, but they get to keep all the tips. However, if a waiter/server at the end of their pay period makes less with their base pay+tips than what the minimum wage for the area would be, the employer is legally on the hook for making up the difference to the employee.
It would seem to be the same - but also restaurant workers likely don’t hit the minimums frequently, since the kitchen would probably be unprofitable to run in settings where front of house are only making $3/hr.
> TLDR: waiters/servers typically have a base pay that’s below the minimum wage, but they get to keep all the tips. However, if a waiter/server at the end of their pay period makes less with their base pay+tips than what the minimum wage for the area would be, the employer is legally on the hook for making up the difference to the employee.
I believe that's the federal rule, but several states with higher than federal minimum wages have a uniform minimum wage for tipped and non-tipped workers. If I'm reading the chart correctly[1], those states/territories include Alaska, California, Guam, Minnesota, Montana, Nevada, Oregon, and Washington.
Briefly, in 2019, until it made the news and the policy was changed so that drivers kept 100% of tips. There's more nuance than "DD was keeping tips", but plenty already written about that if you care to find the 2019 articles.
Some programmer wrote that statement in the code, wrote the function that was given a tip amount and a driver profile and reduced the tip amount to give the driver under certain circumstances. Someone cut that ticket, brought it up in a grooming session, people asked and answered questions about exactly when a driver's pay should be docked. Other devs probably approved the PR. I bet it even has a clear and concise comment explaining the math and the business purpose. I bet there's a unit test about "do_not_overpay_driver_with_tip". Jesus
I bet they all came onto HN and bitched about taxes and Unions after.
If a driver would be paid $5 for a delivery, and the customer tipped $5, the driver should receive $10.
But what was effectively happening instead was that the pay would be reduced by the tip amount to as low as $2. So now that delivery would actually pay $2 plus the $5 for a total of $7.
On longer range deliveries that might pay $10, the customer could tip $8 and the driver would still only make $10.
Now, from what I understand, DD no longer does this practice and legitimately gives the entire tipped amount to the driver with no reduction in pay from DD, but DD lowered the base delivery pay to compensate.
At the time, IIRC, DD tried to wordsmith what they were doing to not make it sound like they were stealing tips, and instead was simply subsidizing poor tippers with a higher base pay and acting like the keeping of the tip was just the removal of the poor-tip subsidy. I say to-may-toe, you say to-mah-toe, it's bullshit. They were stealing tips.
Agreed. Food delivery is a luxury that should only be afforded to the wealthy. There are far too many delivery drivers serving low income areas. We must price out those neighbourhoods immediately.
Poor people can't afford luxuries. It is an unfortunate truth. Having another human do something for you requires you be able to afford their labor. Sometimes we subsidize if you cannot afford it (healthcare). Sometimes we don't (fast food delivery). If you believe you're entitled to undervaluing someone else's labor below a living wage while being poor yourself, can't help that. Belief systems are weird.
If I get food delivered for less than some definition of a living wage, the delivery person is still better off than if I had walked to the restaurant myself. If the delivery person had a better job available, he or she would have taken it.
Depends on the markup. As a person who earns a decent wage I cannot afford to eat delivery food casually as the markup on a per item basis is steep. Even the good pizza place costs near me is $43 for a single large with 4 toppings, with delivery it is closer to $50.
Sure but delivery mark ups and high delivery fees are a recent thing. Plenty of restaraunts offered the same price in-store as for delivery, and the fee was usually $2-4 plus tip. It's not like technology has gotten worse or cars have gotten slower. So it was sustainable, and now they want us to believe it's not sustainable.
Right now yes food delivery is a luxury. I guess the point is... how and why did that happen?
Sort of? Even as a college student, getting crappy pizza delivered at midnight on a cold night versus walking 15 minutes to pick it up ourselves was some definition of luxury.
Seems to be more of a exploitive targeting of mentally ill people. Super sad to see how many young people are ordering from apps like this and not able to afford any sort of decent quality of life without some for of subsidies.
So the suffering of the sick and disabled is of higher value (by some measure) than that of DoorDash gig workers? Why not both? DoorDash can have less profits, and government can provide some support, and everyone comes out ahead except shareholders getting a bit less return (oh noes) and management having lower comp (again, oh noes). These are the people doing the actual work.
You are pitting the wrong socioeconomic strata against each other via your argument.
I don't remember the sick and disabled being able to pay such high premiums on take out. My friend is a dwarf (his preferred term) and spent a summer working for a company out in California. He had to Uber to and from work, just to contribute to the economy.
Meanwhile, in sane countries that invest in their populace, he would have gotten on the bus or train, and he would have kept more of his income.
Maybe instead of gifting entire sectors of the economy to private entities through complete governmental apathy and purposeful neglect, we could work to invest in our own communities without the requirement that it pad someone's bank account who had connections early in life. Maybe we could build a better society if it wasn't a requirement that every service come with a minimum ten percent graft (profit) system attached, with nowadays the extra requirement that profit goes up year over year.
If the economic of delivery apps are unviable in the first place, then it's unlikely these services would exist without the funding of venture capitalists.
That's awful. That happens when bureaucrats, who often don't understand the most simple basics of economics, mandate socialist rules to private companies. The companies affected by these policies will now just fire people to keep staff cost on the same level as before, period. Thus less people trying to fulfill the role of the same amount of delivery guys as before. And such more stress to fulfill more orders in the same amount of time. In other words the situation for the delivery staff is worse than before. Doordash will now have a much higher staff turnover rate where drivers quit after a few months due to e.g. burnout and are replaced by new workers who intend to take the high wage but only for a few months. Serious long-term employee positions are now gone. And as always nobody forces anyone in any way to work for doordash - people have their own free will to choose to work for doordash for any dollar amount that is offered to them.
No minimum wage is what creates competition between companies, all industries affected by minimum wages already have and will have shitty wages for ages to come. Switzerland as an example is a country where cleaners (CHF 4K a month on average) without any serious education earn a bit less than a well educated professional mechanic and 2x more than a local branch bank employee in Germany, simply because of no minimum wage restrictions (also after monthly living expenses in Switzerland which are relatively high in certain aspects).
In Germany and the Nordic states wages are largely controlled by the powerful trade unions, the likes of which do not exist in the US and likely could not exist under current labor laws. Without powerful trade unions to set the floor, we have minimum wages. The alternative - allowing poverty wages - ensures the success of business models that can only survive by employing workers who rely on state aid (or are otherwise destitute). In effect, removing the wage floor just makes government bigger and almost everyone poorer.
> In effect, removing the wage floor just makes government bigger and almost everyone poorer.
Nope, this is absolutely false, it is exactly the other way around.
I am not quite sure what you are trying to accomplish with your whole comment. It neither makes sense nor is it strictly related to what I just posted. Did you want to debate an argument of mine, just post your personal views about labor in general or simply troll? I am always open for a discussion.
Besides are labor unions (you are referring to the British english version) heavily involved in labor and wage discussions in the USA. The US is literally a labor union hell, so I don't get your point on that matter either.
The implication that Dashers earn 2x more per hour than "other workers" earning minimum wage is false, since "other workers" are paid for 100% of the time they work, including when they are waiting for work.