Why Does DoorDash Pay So Little? 6 Reasons
DoorDash is one of the most popular food delivery services in the US, but it’s a well-known fact that the drivers don’t get paid very much per delivery. So, why does DoorDash pay so little?
DoorDash pays so little because shorter orders generally have lower pay. Plus, paying the dashers low wages means that DoorDash makes more profit. So although the reasons may not be fair toward drivers, they’re favorable for the company. However, drivers can receive tips.
This article will discuss the main reasons DoorDash pays so little. Keep reading if you want to learn more.
Reasons DoorDash Pays So Little
It’s no secret that DoorDash pays its drivers meager wages, but it’s unclear why this happens. And on top of the low pay, drivers are technically self-employed, so they don’t even have any benefits or paid time off.
Therefore, it’s best to use DoorDash as a side job rather than a primary source of income. Below are some of the top reasons DoorDash pays so little.
1. The Company Wants To Make As Much Profit As Possible
The main concern for most companies is profit, as they want to make as much money as possible, and one of the ways to do this is to pay the drivers lower rates.
If DoorDash were to pay its drivers more than it currently does, the profits would decrease significantly due to the increase in wage expenses.
That’s another big reason why the pay is so low.
2. They Expect Drivers To Receive Tips
Another thing DoorDash takes into account is tips. It’s standard to tip between 15% and 20% for each order, so DoorDash hopes that customers will cover this. However, not all customers tip.
In that case, the delivery may not be worth your time and effort.
It’s the same with many other jobs in the service industry. For example, many restaurants across the US pay as little as $2 an hour to waiters and waitresses because they expect the customers to make up the rest of the money in tips.
This is nothing new, and DoorDash is simply following this business model.
Usually, customers tip the driver before the order is delivered. Thankfully, you can see this beforehand, so you’ll know whether or not the delivery is worth your time.
However, some customers only tip after the delivery is complete, and others tip in cash. So it’s not always a good idea to accept or decline deliveries based on tips, as some customers like to wait until the end.
3. Short Distance Deliveries May Pay Less
DoorDash sometimes pays less for deliveries it feels won’t take much time to complete.
For example, if the customer’s home is five minutes away from the restaurant, the pay for that delivery is likely to be pretty low. A driver’s minimum amount for one delivery is $2, so you can expect short-distance deliveries to be around this price.
Here’s how to make your short deliveries worth your time:
- Make multiple deliveries in an hour. After all, if they don’t take too long, you’ll have the time to do more deliveries during the same hour.
- If delivery takes you more than 10 minutes to complete, it’s probably not worth accepting a $2 order.
- If you have a longer delivery, you’re not guaranteed to receive the maximum amount ($10). For example, you may only get $6 or $7, so you can make two or more of these deliveries if they are close to each other.
- You can decline low-paying deliveries until a higher-paying one appears on the app.
It’s likely that DoorDash factors in the amount of time it will take a driver to deliver, and that’s mainly how they come up with the pricing. You can use DoorDash to earn some extra cash on the side, but if you’re relying on it as a full-time gig, you’ll need to be quick and put a lot of effort into it.
Plenty of jobs pay well without a degree, so you should look into them if you want to move away from DoorDash.
4. Drivers Can Often Do Multiple Deliveries In an Hour
Although DoorDash pays so little, drivers can usually do multiple deliveries in an hour. So while $5 for one delivery seems extremely low, it doesn’t work out too badly if you can do three to four in an hour.
DoorDash likely takes this into account when deciding on pricing. If you receive an order that only pays $2, you’ll probably be able to do many more deliveries within the same hour.
However, DoorDash isn’t the only thing you can do with a vehicle. For example, if you have a van, you can do things like deliver parcels or start a cloud kitchen. You should consider some of these options before putting all your effort into DoorDash.
5. There Are Many DoorDashers
Another factor that could cause DoorDash to pay so little is the abundance of drivers.
According to the DoorDash website, there were over 100,000 dashers across the US and Canada in 2017. And the company has grown since then, so there are likely to be far more today.
You may wonder how this affects the amount that DoorDash pays its drivers.
If there are more drivers, more of them will be willing to accept lower-paying orders. On the other hand, not many drivers would accept low pay if there weren’t many of them working in the first place because they’d have more options.
So, you could say that DoorDash pays so little because the company knows there will always be people willing to accept the low pay.
6. There Aren’t Many Entry Requirements
You don’t need a degree or any formal education to join DoorDash, and almost anyone with a phone and a vehicle can get started. While the job has little to no entry requirements, the pay is generally also low.
Beyond Doordash, there are other things you can do to earn money without formal education or training, and they often pay more.
For example, many people make careers online with little experience or formal education. An example includes being a virtual assistant. Although some people with these careers have degrees, it’s not a requirement.
It’s no secret that DoorDash pays so little, but why is that? To recap, some of the main reasons include:
- Short deliveries pay less.
- Doordash can make more profit by paying less.
- Tips are expected.
- No formal education or experience is required to work for DoorDash.