On Thursday, California DoorDash workers demonstrated outside the home of Tony Xu, CEO of DoorDash. This was prompted by a California Superior Court Judge declaring Proposition 22 2020 unconstitutional. California's Prop 22 was passed in November and would allow app-based companies such as DoorDash, Uber, Lyft, and Lyft, to continue classifying workers instead of employees.
About 50 DoorDash workers, who are associated with advocacy groups We Drive Progress or Gig Workers Rising, traveled in a caravan to the front of Xus House in San Francisco's Pacific Heights neighborhood. They demanded transparency from DoorDash regarding tips, 120% of the minimum wage, or approximately $17 an hour, and that they stop unfair deactivations.
We value the feedback and concerns of Dashers and will continue to listen to them, a spokesperson for DoorDash told TechCrunch. We know that today's participants don't represent the 91% California Dashers who want their businesses to be independent contractors, or the millions who overwhelmingly voted for Proposition 22. Prop 22's passage has solved many of today's concerns through its historic benefits, protections, and workers now earn 120% of the local minimum wage per hour, plus 100% of their tips. They also get free PPE, and have access to healthcare funds.
DoorDash drivers claim that they are only paid for their time active. This means they pick up and drop off food, and not for waiting online for gigs. According to DoorDash's pay structure, they also claim that most of their living wages come from tips. This should be a bonus but it helps them make ends meet. DoorDash claims that drivers can use multiple apps simultaneously while they are working or driving for personal reasons.
Prop 22 also guarantees a reimbursement of 30c per mile for drivers, which would be great, say drivers.
Rondu Gantt is a gig worker and has been with DoorDash for 2 1/2 years. He also drives for Uber or Lyft to make ends meet. His base pay at DoorDash is usually $3 an hour and 40% to 60% of his income comes from tips. This model is similar to the American restaurant industry, which can be very lucrative for servers and bartenders. However, it's not sustainable for delivery drivers as tipping culture in America isn't nearly as strong.
DoorDash charges so little because they want it to be affordable for customers, but it can become prohibitive for drivers, Gantt said to TechCrunch. He cited the high costs of maintaining, parking, fueling and owning a car as potentially crippling. I made $405 last week after driving for 30 hours. This is $13.50 an hour, which is lower than the minimum wage.
Gantt stated that drivers have also had to endure pressure to drive in unsafe environments. We can see the photos of New York City delivery drivers during Hurricane Ida to show just how many drivers are forced to accept certain conditions. DoorDash drivers have been recognized as essential workers over the past two-years, providing assistance to many people in times of pandemic.
Gig Workers Rising claims that DoorDash workers have received very little or no safety support. Some workers report being reimbursed only 80 cents per person for PPE and cleaning equipment they use to keep their customers safe. Workers can also learn more online about PPE and place weekly orders.
TechCrunch was told by Gig Workers Rising spokesperson that gig work is not flexible right now. When there is demand, workers are subject to it. They would be employees if they could change their work as they'd have healthcare and the option to take a day off.
Prop 22 was declared unconstitutional by the spokesperson.
He said that gig corporations are breaking this law every day by refusing to comply with it.
DoorDash insists that Prop 22 remains the law. They expect the ruling to stand and Prop 22 will be upheld.
Gantt's part is that he doesn't want to be an employee. He just wants to ensure that he gets what he deserves.
He said that this is not the minimum wage. A minimum wage would also be unacceptable. Minimum wage is unacceptable because of the risk and cost. They may not pay you the minimum wage, but they do sometimes pay taxes. After taxes youre definitely making less.
TechCrunch had access to DoorDash worker dashboards which break down their salaries. One dasher received $574.21 for 53 deliveries. $274 of those came from customers tips. His active time was 14 hours 21 minutes and his dash, which is when he was logged onto an app waiting for gigs and performing deliveries, was around 30 hours.
DoorDash guaranteed earnings for the week were $300.21. This number was calculated to ensure that drivers return home with 120% of their minimum wage for active work time. The base pay was $257.62. DoorDash added $42.59 to adjust for guaranteed earnings. Divide the amount DoorDash paid the worker by the hours worked, and the worker would be paid approximately $21 an hour. It looks closer to $10 an hour if you divide it by the dash.
This is not before tax. Because they are required to pay self-employment taxes of 15.3% of their taxable income, federal tax tax and state income tax, independent contractors should save around 30% of their salary. This contractor would earn around $13.40 an hour after taxes if he worked 30 hours, with $274 in tipping.
During Thursday's protest, drivers demanded transparency as tips were a concern. Gantt states that dashers can see the cumulative tip earnings for each week as well as the tip amount from each order. However, they don't trust that the tip amount they are receiving is the actual amount they're getting. TechCrunch was assured by DoorDash that drivers do indeed receive 100% of their tips.
Gantt and the other drivers aren't being paranoid. DoorDash paid $2.5 million last November to settle a lawsuit that claimed the company took drivers' tips and made it appear tip money was going to drivers. Karl Racine, Washington, D.C. attorney-general, filed the suit claiming that DoorDash had reduced drivers' pay by the amount of any tip. DoorDash denied the allegations, claiming they relate to its old pay model that has not been used since September 2019.
DoorDash made a $113m profit in the second quarter adjusted for EBITDA. However, it was ultimately unprofitable, with a $102 million net loss. One of the most popular protest calls was for Xu's share of the wealth. DoorDash made a $113 million profit adjusted for EBITDA, but was overall unprofitable with a net loss of $102 million. This includes stock options and salary. DoorDash claims that Xu hasn't been paid any of this compensation as of today. Xu is only paid if DoorDash outperforms market performance and achieves a 5-x return in seven years.
Gantt said that we all work for money. The way that the money is distributed after they have earned it tells you who matters and who doesn't. This is a clear indicator of who is important and who has value. They don't value you if they don't pay you.
DoorDash has updated this article with additional information.
