DoorDash said Wednesday that it will begin offering its delivery drivers the option of paying the hourly minimum wage instead of earning money for each delivery.
The significant change in compensation may be a response to concerns that some delivery people are not paid fairly. To this may be added an incentive for drivers to take small orders that do not pay and which they would normally avoid.
DoorDash said drivers will be able to choose whether they earn money for each order they place — typically a few dollars in a base salary and compensation for miles driven — or receive a flat hourly amount.
The hourly rate only includes active time, meaning the time between accepting and dropping off an order, and does not include the period drivers are waiting for the next order. Drivers will be able to toggle between the two payment methods. Tips will be applied over and above the hourly base salary, the company said.
DoorDash, which uses gig workers to transport food and other deliveries, announced the change as part of Dash Forward, a product program marking DoorDash’s 10th anniversary.
DoorDash said it is adding the payment option in response to driver feedback, and because it wants to give more decision-making power to drivers.
“One of the things we hear a lot about is choice: the choice of when, where and how they earn is really important,” said Cody Aughny, head of the company’s Dasher & Logistics team.
The relationship between gig workers and companies like DoorDash and Uber has come under scrutiny by regulators and labor activists in recent years. The biggest question is how those workers are classified and whether they are paid adequately.
Gig drivers are typically independent contractors who are responsible for their own expenses and do not receive benefits like full-time employees. They have long complained that they are paid low wages by companies and sometimes even exploited.
DoorDash said drivers who chose to be paid hourly and those who earn money per delivery are likely to earn a similar amount. The company said minimum compensation will depend on the region and range from $10 to $19.50 an hour.
The new payment method is similar to Proposition 22, a 2020 California ballot measure that was backed by gig companies and guaranteed a minimum wage and other limited benefits in exchange for preventing drivers from being classified as employees.
But DoorDash said there’s a big difference: Drivers can switch between paying per hour and per-delivery as often as they want. The new system won’t be used in California, Seattle or New York — areas that have passed laws governing minimum wages for drivers.
Sergio Avedian, a longtime driver and contributor to The Rideshare Guy, a blog that provides tips to gig drivers, said the hourly pay option “gives drivers a little comfort zone.”
Mr. Avedian, who encourages drivers to decline orders that aren’t likely to pay well or tip well, said hourly pay could be a way for DoorDash to get them to accept smaller deliveries. which he must have abandoned.
“On their side, the issue is to push as many orders as possible and on the driver’s side, it might give them some protection,” he said.
DoorDash said that, because some drivers decline less desirable orders, those who accept everything they are offered receive a disproportionate number of those cheap deliveries and are at a loss. An hourly minimum wage would help that group, the company said.