DoorDash is a great way to make some extra money. But when considering any job or side-hustle, you have to ask yourself how it compares to other opportunities.
Does DoorDash pay the minimum wage or more? Or are you better off getting a part-time job? We looked into it and this is what we found…
Does DoorDash Pay The Minimum Wage?
DoorDash drivers are not employees of DoorDash, rather, they work as independent contractors. This means that we are not looking at ‘what DoorDash pays’ but at what DoorDash drivers can earn. And DoorDash drivers can earn the minimum wage.
This article takes a look at DoorDash drivers: what they can earn, what it takes to earn it, and if there are any other perks with the job.
Do DoorDash Drivers Make More Than The Minimum Wage?
In the U.S., delivery drivers can be classified either as employees or as independent contractors — and there’s a legal distinction between the two. According to the Internal Revenue Service, when the payer controls the result of the work, but not what or how it’s done, the payee (or driver) is a contractor.
For contractors then, the payer (in this case, DoorDash) doesn’t withhold taxes from their independent contractors, and they aren’t required to offer benefits. To keep drivers ‘on task’, delivery platforms typically use a complex system or ratings and rewards rather than non-negotiable policies and rules.
Some policies, however, such as safety and health regulations apply regardless of employee classification.
This means that DoorDash drivers who want to make more than the minimum wage do it by sheer hard work. It also explains why estimations for hourly rate paid by DoorDash vary so much. The amount of money a dasher earns depends on where they work, when they work, how much they’re prepared (or able) to commit to dashing each day, and how they make deliveries.
Hourly pay is also affected by weather, road conditions, work availability, and tips.
Historically, dasher pay was also manipulated by other (controversial) DoorDash strategies such as ‘withholding tips, reducing tip transparency, antitrust price manipulation, listing restaurants without permission, and allegedly misclassifying workers’.
The average DoorDash Driver hourly pay in the United States can be around $13 and $19 per hour.
What Is DoorDash Base Pay?
Base pay from DoorDash to Dashers ranges from $2 to $10+ per delivery, depending on the estimated duration, distance, and ‘desirability’ of the order. Deliveries that are expected to take more time and that require Dashers to travel a longer distance, and that are less popular with Dashers, now have a higher base pay.
Dashers also have the opportunity to earn more through promotions. These include Peak Pay and Challenge Bonuses. When it’s busy, Dashers can earn extra money on each delivery through offered bonuses.
This system, or course, rewards the most active Dashers and helps them meet specific earnings goals for the week. Although the ‘business’ generated by a location can be predictable, it is also at best, outside the driver’s control.
The pay model, therefore, is made up of the base pay plus incentives plus tips. DoorDash does not provide a formula for how they calculate their base pay. They provide instead, a description of how this pay is based on time, distance and desirability.
DoorDash couriers do have the right to accept or reject delivery offers. Usually they will decide based on a factor of how well a delivery offer pays for the time, effort and expense involved to the driver.
This is where ‘desirability’ comes into it. The customer tip is the biggest factor in whether an offer is desirable’. If the base pay is only $2 and there is no tip, that delivery offer is likely to be rejected. In this situation, DoorDash will often increase the base pay in order to increase the “desirability” of the order and encourage a driver to accept the order.
DoorDash will also often pay extra to encourage their drivers to get out at peak times when they are needed the most. After all, a consistent availability of drivers reflects well on the company.
Bonuses are particularly needed when the weather is bad, traffic conditions are poor, or on the weekends when many people order in. Incentives offered during these times are called Peak Pay incentives. However, when there are enough drivers to meet demand, the incentives dry up.
This means that when calculating DoorDash pay, the availability of incentives is significant, but again, not completely within the driver’s control.
DoorDash will also (at times) offer challenges. These are typically a monetary reward to any dasher who can complete a set number of deliveries during a calendar month. In January of 2021, the incentive was $200. The required number of deliveries was 450: a substantial commitment!
What Is The Minimum Wage In The United States?
According to the US Department of Labor, the minimum age in the United States is $7.25 per hour. This is a federal law and therefore applies to all states and has remained unchanged since 2009.
Individual states also have minimum wage laws, and these vary from the mandatory $7.25 per hour to $15.20 per hour (in Washington D.C.).
There has been pressure for some time to raise the federal minimum wage to $25 per hour by 2025. Meanwhile, individual states have increased state wages (24 states increased hourly rates in 2021) and 26 states are increasing hourly rates in 2022.
What Benefits Does DoorDash Give To Drivers?
Because DoorDash Dashers are classified as independent contractors, full medical and health benefits are not guaranteed. However, DoorDash does have services in place to support dashers.
Currently, DoorDash is the only food delivery service company that offers a benefit program to its employees. Eligible Dashers can participate in the Rewards program to unlock rewards such as higher pay, cards for gas, and DoorDash credits.
DoorDash also partners with Stride Health, an insurance coverage company that connects individuals with health plans covered under the Affordable Care Act (ACA). Stride Health acts as the liaison between you and a medical insurance provider.
To be eligible to participate in the rewards programme, drivers must, each month, meet the specific mid-month requirements and maintain them until the last day of the month:
- A customer rating of at least 4.7
- Completion rate of at least 95%
- Acceptance rate now lower than 70%
- 100 completed deliveries during the last month
- At least 200 lifetime deliveries completed
- Various COVID-19 related benefits
DoorDash employees are contractors, and as such, are classified as independent workers.
This means they can pretty much create their own schedules and work goals. To get the most out of their drivers, DoorDash offer a system of rewards and benefits designed to motivate drivers and keep them working hard.
Through this reward scheme, individual drivers can earn a minimum wage and more, with hourly pay made up of a combination of base pay, incentive pay, and tips.