Amid public retaliation, DoorDash is abandoning its questionable pay model, and will now increase driver earnings by the exact amount a customer tips on every order.
On Wednesday (July 23), DoorDash CEO Tony Xu said on Twitter that the company will soon change its policy, CNBC reports.
“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,” Xu said in a tweet.
Backlash Prompts DoorDash To Change Tip Disbursements
The policy change comes two days after a New York Times reporter gave a firsthand account of making food deliveries for DoorDash and Uber Eats. The story revealed that customer tips were not included in full.
Companies like DoorDash and Instacart have said the model benefits drivers because earnings are more consistent, NBC previously said. Customers assumed 100 percent of the tip went to the person delivering.
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”After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency and consistency of earnings, and to ensure all customers get their food as fast as possible, ” Xu said on Twitter. “But it’s clear from recent feedback that we didn’t strike the right balance.
In a May funding round in which DoorDash looked to raise at least $500 million, it was reported the San Francisco food delivery startup could be valued at roughly $13 billion. This followed a $400 million investment at a valuation of $7.1 billion in February.
Shortly after the big funding and valuation jump was announced, the meal delivery company found itself under intense and persistent fire for how it pays its delivery workers. Specifically, it was one of many firms accused of essentially pocketing workers’ tips.
