DoorDash Introduces Hourly Pay for Dashers

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DoorDash drivers can now choose between two ways to get paid while making deliveries. Find out how this news could impact DoorDash gig workers financially. 

What happened

On June 28, DoorDash announced in a news release that it would give Dashers more flexibility, by allowing them to choose between two ways to earn money while making deliveries on the platform. Dashers can now choose whether to earn by time or earn per offer.

The earn-by-time option will allow Dashers to be paid a guaranteed hourly rate for their time spent on a delivery, plus keep 100% of the tips they earn. Previously, most Dashers were paid per offer, meaning they received a base payment for each delivery and any tips they made.

So what

DoorDash is a top side hustle option for contract workers. The food delivery app company is now offering another way to get paid while making deliveries in response to feedback received from Dashers. “One of the things we’ve heard a lot is around choice: Choice of when, where, and how they earn is really important,” a DoorDash spokesperson told The New York Times.

Dashers who earn by time will be paid a guaranteed hourly rate for their time spent on deliveries, starting when an order is accepted until it’s dropped off. Dashers are shown the hourly rate upfront. They will also get to keep 100% of the tips they earn.

However, there’s one catch: Dashers won’t receive payment for idle waiting times between deliveries. The brand told The New York Times that the minimum hourly compensation rate varies by region, and will range from $10 to $19.50 per hour.

Dashers who prefer to be paid per offer can continue to do so. Those workers will also get to keep 100% of the tips they earn. Drivers can switch between payment methods at any time. This change gives Dashers more control over how they’re paid, provides greater pay transparency, and may encourage more Dashers to take smaller delivery orders.

Now what

If you’ve been considering a food delivery side hustle like DoorDash, this is news worth knowing. You may want to try the new hourly payment method to see if it works well for you. You can always switch back if you prefer to be paid per offer. With time, you can determine the best payment method for maximum income potential. After all, the goal is to boost your checking account balance as much as possible.

Before starting a new side hustle, it’s essential to consider how the decision will impact your personal finances. If you’re new to gig work, remember you’re a contractor — not an employee. You should stash money in your savings account to cover your tax bill. Since you’re self-employed, you should also make quarterly estimated tax payments to avoid penalties.

No matter what kind of side hustle or gig work you do, it’s recommended that you have a solid emergency fund. If an unexpected bill comes your way, you’ll feel more prepared if you have a sizable amount of cash in savings. An emergency fund can help you avoid credit card debt.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash. The Motley Fool has a disclosure policy.

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