DoorDash bringing hourly pay option to delivery workers

DoorDash revealed Wednesday a new hourly-based earning option for its delivery workers.

Under the new mode called “Earn by Time,” the amount of money a participating DoorDash courier can make on a given delivery comes from a “guaranteed hourly minimum rate” and whatever tip the person who placed the order elected to give, the company said in a blog post. DoorDash will display the rate upfront.

Its implementation is meant to extend more flexibility and choice to delivery people working on DoorDash.

The guaranteed hourly rate “varies by market but on average, is calculated such that Dashers earn roughly the same whether they choose Earn by Time or Earn Per Offer,” the other payment method for delivery workers, a DoorDash spokesperson told FOX Business.

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The calculation for pay with the hourly rate is based on the timeframe running from when they take on an order to when they drop it off, DoorDash said.

The DoorDash spokesperson said Earn by Time, which began testing last year, is expected to launch across the U.S. by year-end.

“In markets where a legislated earning standard is in place, or will be soon, such as New York, Seattle, California, Dashers already receive a guaranteed hourly rate,” the spokesperson said. “We do not currently plan to roll Earn by Time out in those markets.”

With the Earn by Time and Earn Per Offer modes, DoorDash has made it so that its so-called “Dashers” can switch between the two.

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With the latter option, delivery workers get a guaranteed amount of money determined by how much time and travel the order will involve, as well as its “desirability,” according to the company. They also get tips and other variable earnings.

In the event of a cancellation by the customer or merchant, DoorDash delivery workers using Earn by Time will receive the guaranteed hourly rate from the time they get the order to when it got terminated, according to a webpage on the feature. 

On top of the new earning method, DoorDash delivery workers are getting the capability of sharing their live location while working with five people. Through another feature, they will get taken to the area where they want to do deliveries, receiving orders on the way. 

Over 6 million workers around the world did a DoorDash delivery last year, according to the company’s latest annual report. Its total orders hit $1.74 billion for 2022, marking a roughly 25% rise from the prior year. 

In May, revenue came in at $2.04 billion for DoorDash’s first quarter, nearly 40% higher in comparison to the same period in the prior year. That was accompanied by a net loss of $161 million that was slightly lower than the $167 million posted in Q1 of 2022.