DoorDash Reforms Tipping Model Following Controversy

According to an article on ResturauntDive, DoorDash CEO Tony Xu announced that the company would be "changing its tipping model to compensate its delivery people the entire value of any tip paid through the app."

Under the old system, which the company rolled out in 2017, the article states that “DoorDash used tips given to delivery workers through the app to subsidize their base pay. If the amount of a tip went over a driver's base pay, the company would use it to subsidize the driver's pay, thereby paying less into their wage than if the driver had not received a tip.”

As the delivery mobile app market grows, tech workers are demanding better conditions and higher pay. According to the article, in March, “more than 100 tech workers signed an open letter pledging not to work for DoorDash until it set a minimum pay rate of $15 per active hour working, paid tips to workers in addition to their base pay and provided detailed information on pay.”

In response to the controversy, Xu stated: “It was clear from recent feedback that we didn't strike the right balance. We thought we were doing the right thing by making Dashers whole when a customer left no tip. What we missed was that some customers who did tip would feel like their tip did not matter."