Some DoorDash drivers are fed up with the unpredictable delivery business: Some orders can take longer than expected due to circumstances outside of workers' control. The company said it has a solution.
DoorDash will begin offering its delivery drivers hourly pay, the company said Wednesday, to help make sure workers have a better sense of how much they'll earn per shift. The new payment model comes just after DoorDash criticized New York City's minimum wage for app drivers.
The delivery service said Wednesday that Dashers, its name for people who make deliveries, will now have the option to earn a prorated hourly minimum rate, in addition to tips. The clock starts when they accept a delivery offer and ends when they complete the delivery.
DoorDash made the announcement as part of a series of changes in honor of its 10th anniversary, noting that the new payment option is "the biggest-ever update to the way Dashers earn." It will roll out nationally through the end of the year.
Here's how it works: When deciding whether to take an offer, drivers can see how much they'll earn per hour. Previously, delivery workers were paid per delivery offer, an option which remains available. The hourly rate is calculated to be comparable to what workers would earn per delivery, the company noted.
The advantage of an hourly rate is that Dashers know that they'll be compensated for their time if they're stuck in traffic or waiting for slow restaurant order, noted Cody Aughney, head of DoorDash's Dasher and Logistics business teams, during an event discussing the changes.
"From talking with Dashers we know there are some who prioritize more consistency," he said. "They want to know exactly how much they're going to make for their time spent Dashing."
Hourly rates won't be available in markets where there is a legislated minimum hourly wage for drivers, according to the company.
New York City recently announced a new minimum pay-rate for app food delivery workers. Delivery workers in the city make about $7.09 per hour, and the new rate will let them eventually earn at least $19.96 per hour, according to the Mayor's office. Pay is going up to $17.96 an hour on July 12, and then increasing to nearly $20 an hour in April 2025.
DoorDash said in a statement around the time of the city's announcement that it is considering litigation to push back against the "extreme policy," saying it goes beyond the standards other industries are held to — though it's not opposed to a minimum wage for delivery workers.
On Wednesday, the company said it is making other changes that should help delivery drivers earn more, like letting customers add or increase a tip up to 30 days after the order has been delivered, and introducing a feature called "Dash Along the Way," which helps match drives with orders that are along their commuting routes. It's also allowing drivers to share location with up to five contacts as a safety measure.
The changes are "all about increasing earnings potentials for Dashers, and providing Dashers with additional peace of mind — two things the Dasher community is consistently telling us are priorities for them on the road," Austin Haugen, who leads the product team for Dasher and Logistics at DoorDash, said during Tuesday's event.
— CNN's Ramishah Maruf contributed to this report.