Tony Xu, DoorDash’s chief executive, said delivery drivers for the app will “earn more money on average” under the new system.
The drivers, who are known as “Dashers” and work for the company as contractors, will receive 100% of the money a customer offers as a tip. Previously, a portion of the tip money could be applied to a driver’s guaranteed base pay instead of adding to it.
DoorDash customers will be able to tip their delivery person during checkout or after the delivery is made. The company is also establishing incentives for drivers called Peak Pay and Challenge Bonuses.
“When it’s busy, Dashers can earn extra money on each delivery through Peak Pay, and Challenge Bonuses will better reward more active Dashers and help them meet specific earnings goals for the week,” the company’s blog post announcing the changes reads.
DoorDash came under fire in July after customers learned through a New York Times story following a Door Dash driver through their workday that the company used the driver’s tip money to pay their base pay.
Critics called that system “deceptive” and argued that their tip money should be used in the traditional sense: to reward a delivery person’s service with money that adds to their base pay.
In response to the backlash, Xu vowed to change the company’s policies.
He said at the time that the company “didn’t strike the right balance” when creating a pay model to “prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible.”
“We thought we were doing the right thing by making Dashers whole when a customer left no tip,” Wu tweeted. “What we missed was that some customers who *did* tip would feel like their tip did not matter.”
Instacart, a competing delivery app, was forced to end a similar tipping policy in February after reports revealed the company practice.
Instacart founder Apoorva Mehta said at the time that the company was going to separate tip money from its workers’ base compensation. Mehta also vowed to increase delivery drivers’ base pay.
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