DoorDash and Amazon Flex have changed their controversial tipping policies that lumped tips into minimum payments for drivers.
Both companies said their policies now add customers’ tips to drivers’ minimum payments. Also, for the first time ever, DoorDash is allowing customers to tip after their orders have been delivered, giving them the opportunity to reward drivers for good service.
The news comes after customers criticized both companies for absorbing tips into minimum payments. Customers argued that their tips helped the companies rather than provide bonus money to drivers for a job well done. Both DoorDash and Amazon Flex previously stood by their original policies, even amid the backlash.
“We initially resisted change even in the face of public pressure because we built our model in direct response to feedback from Dashers,” DoorDash CEO Tony Xu said in a release on Thursday. “We thought we were doing the right thing for Dashers by making them whole if a customer left no tip, but the feedback we’ve received recently made clear that some of our customers who were leaving tips felt like their tips didn’t matter.”
DoorDash announced its new policy on Thursday, saying it will gradually roll out across cities and be fully implemented by the end of September. That announcement came one day after Amazon Flex told drivers about its new policy, separating tip from minimum payments, which began Thursday.
As part of its new policy, DoorDash will contribute $2 to $10-plus, up from $1, as the minimum driver payment per order. The contribution amount will be based on estimated duration of the delivery, distance, and desirability of the order. DoorDash will also provide additional payments during promotional periods, such as peak delivery times. Any customer tip will be added on top of those amounts, and drivers will be able to see a full breakdown of how much money they made from each of the orders.
Under the new policy, DoorDash expects that drivers will make more money, given that the company is contributing more and customers will have the ability to reward good service post delivery. The company said it has hired a third-party economic research firm to monitor the results and provide feedback.
DoorDash has been working on a new tipping model for about a month following Xu's tweet admitting the company "didn't strike the right balance" in how it paid its drivers.
Meanwhile, Amazon Flex will also start providing drivers who deliver on Prime Now, Amazon Fresh, or Whole Food services a breakdown of how much they’re earning from the company and how much they’re getting tipped. The company said as a part of its new policy, its also promising to pay $15 to $19 per scheduled hour based on location. Previously, the company told drivers they would make $18 to $25 an hour, sometimes using customers’ tips to guarantee the wage.
Amazon also expects drivers to make more money under the new policy.
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