I always recommend people drive for multiple ridesharing companies and, if they’re up for it, signing up to deliver food as well. After all, if you’re going to be in the car, making money, you want to stay busy, right? Today, RSG contributor Dash Bridges explains how DoorDash guaranteed pay and incentives work, just in time for the Labor Day rush! Want to get started with DoorDash? Click here to sign up!
Hey everyone, Dash Bridges here to talk food delivery. But before I do, let me say that guarantees are not what they used to be. For most of my life, I could rely on certain guarantees:
- The Chicago Cubs lose
- Democrats win Wisconsin
- America’s Favorite Dad is Bill Cosby
The world has gone upside down, OK? There is very little we can count on anymore.
Editor’s Note: You can still count on death and taxes as a guarantee. So make sure you’re tracking your mileage and expenses with an app like QuickBooks Self-Employed. It’s great at helping with taxes and the first 30 days are free.
Thankfully, when DoorDash offers a guarantee, they follow through. Here’s how it works:
Oh. Before I make my observations, I want to remind everyone that I’m your standard Independent Contractor. I don’t earn money from DoorDash other than my Dashing. I’m not on the inside. I’m not asked to push an agenda. I paid $23 for my two damn pizza bags, OK!? I’m just an enthusiastic Dasher chasing cash and offering observations.
As you may know, DoorDash pays for deliveries two ways:
1. A flat delivery fee for each completed order and
2. 100% of customer tips.
Traditionally, there’s no guaranteed pay in this arrangement. You can sign in for three hours, get zero orders and go home empty handed. But, during certain periods when DoorDash anticipates unusually high volumes, they’ll add sweeteners to ensure they’ll get enough Dashers on the road. In my 21 months of DoorDash experience, I’ve seen one program offering guaranteed pay, and another that adds incentives to stay signed in and accept orders.
There are a variety of factors that lead to a busy DoorDash day, and they all converge on Labor Day.
- College-age Dashers quit DD and leave for school.
- People arrive home from a holiday weekend and don’t want to cook.
- Marque college football games.
Prior to Labor Day 2016, I received my first email from DoorDash outlining their structure for guaranteed pay. In part, it said:
Even though I worked before and after the period of guaranteed pay, the DD system looks specifically at that Guarantee Pay period. DoorDash shows the guarantee payment in the ‘bonus’ section of your earnings. Seeing that I earned $0.00 in bonus pay, that means my earnings between 5-9 p.m. were above $18/hr.
A month later, DoorDash instituted Guaranteed Pay for several days during a huge TV-watching period, including: SF Giants & Chicago Cubs playoffs, Presidential debates & election nuttiness (political TV viewership was through the roof at the time) and NFL football. Looking back at my notes, I found this:
As you can see, I was signed in from 4:34 p.m. until about 9:50 p.m., working 5.3 hours and averaging $21.13/hr. DoorDash’s $18/hr. guarantee didn’t apply because I made more than that through my normal earnings.
There were days when guarantees were $22 & $25/hr. There were some days when I didn’t need the guarantee because I made more than the minimum through normal earnings. There were some days when guarantees saved my shift (i.e. October 3 & 4). Regardless, October 2016 was the biggest month of my career, with the most hours, deliveries and money earned. The incentives to sign in were there, even if I didn’t actually need the guarantees on some of the days. Also, my girlfriend broke up with me in late September, so my calendar was suddenly wide open.
Those hourly guarantees were great for me, but DoorDash executives probably didn’t see it the same way. Looking at the bonus payments above, they likely winced at the extra cash paid out. Look at October 3 & 4 again. In those two days they paid me $67 over and above what I legitimately earned. Imagine those payments multiplied by hundreds of Dashers who were promised those guarantees and sat idle in their cars.
DoorDash promised these guarantees to ensure coverage, but when the orders didn’t live up to the forecasts, they got caught with a huge expense. Of course, there are non-cash flow benefits. For instance, maybe they gained a lot of new customers who received prompt, high-quality service due to Dasher availability. Those new customers will expand the customer base and bring in recurring revenue for months or years to come. That’s a long-term payoff that’s difficult to quantify.
Still, I imagine DoorDash corporate didn’t like this plan, and I haven’t seen it since it briefly appeared last December. Instead of paying Dashers for passive contributions (time), they decided to pay for active contributions (deliveries), leading to programs like…
Whereas Guaranteed Pay is a time-based incentive, Extra Pay is a delivery-based incentive described as:
- An additional $1 or $2 flat bonus paid per delivery.
- Amount depends on the region worked.
- Valid for orders assigned during specific times, typically 11 a.m.-1 p.m. and 5 p.m.-8 p.m.
- To qualify, Dashers must accept at least 75% of orders assigned during this period.
Long story short, instead of the normal $6 delivery fee, you can earn $7 or $8. Some boosts, seen below, went up to $4/delivery, though the ones I’ve seen in the past few months remained at $1-$2.
Here are some of my shifts from earlier this year. We had a ton of rain and cold this winter, and many, many days had factors contributing to heavy order volumes. DoorDash needed drivers, so they broke out the bonuses:
For any particular day, in the app it looks like this:
Earlier this month I dashed on a night that offered an extra $1/delivery from 5-8 p.m. Per the norm, the app breaks down your earnings by types, then conveniently breaks out your extra pay, showing your acceptance percentage. I appreciate the transparency of the calculation. On this night, I accepted all the orders assigned to me and earned my additional $6.
During periods when your acceptance falls below the 75% threshold, you see that as well.
I always get a chuckle when I fail to earn the Extra Delivery Pay yet still see it listed alongside my other earnings. The app is mocking me! “You know Dash, you could’ve had an extra $14.00 but you selfishly declined too many times. See it? Right here. $14. But nah. I’m disappointed in your choices.”
On first thought, you might think, “The app has a point. You’re throwing away free money!” But wait! Is the extra $1-$2 worth it if you’re accepting a $15, 15-mile order? That order might take 45 minutes. If you decline the order, maybe the one that comes up next is a $50, 5-mile order that takes half the time and generates a larger tip.
So you’re always weighing the alternatives. For me, Monday, June 12 was Game 5 of the NBA Finals. I live here in the SF Bay Area, home of the Golden State Warriors. I knew this would be an extremely busy night. There’s no way I was going to waste my time on a small, long-distance order for a lousy $2. I declined more orders that night than ever, and I know it paid off.
Every time I declined a bad order a better one popped up within 30 seconds. Look at those tips. Traditionally about 60% of my pay comes from delivery fees. By the same ratio, I would have made about $44 in tips. Because of the deliveries I accepted, I made an extra $30, drove fewer miles and probably had time to accept an additional order or two because of my time saved. True, I lost $14 by not earning the pay, but I’m convinced I made the right choices.
On typical nights, lacking a major TV viewing event, the Extra Pay incentivizes me to accept the less-appealing orders because I don’t know if I’ll see a better order in its place. If I decline a marginal order and sit idle for 20 minutes, I’m losing money.
If you’ve read this far, congratulations! You’re an official DoorDash Guarantee/Extra Pay policy expert! At your next summer BBQ, I encourage you to regale your friends and neighbors with stories about this topic!
Speaking of summer… summertime brings changes to the Dashing experience. And for Dashers, summer can be cruel. We’ll talk about that next time.
Until then, drive safely!
Readers, what do you think of this DoorDash Guaranteed pay and incentives, and do you have tips or strategies for other Dashers?
Make Every Mile CountDid you know that every 1,000 business miles can generate $535 in tax deductions? Never miss another mile with the new QuickBooks Self-Employed automatic mileage tracker.
-Dash @ RSG