DoorDash Workers Protest CEO Tony Xu's Home - Pay & Transparency Demands

DoorDash Workers Protest CEO Over Proposition 22 Ruling

DoorDash delivery personnel staged a demonstration outside the residence of CEO Tony Xu on Thursday. This action followed a recent decision by a California superior court judge that deemed 2020’s Proposition 22 unconstitutional.

Background on Proposition 22

Proposition 22, approved by California voters last November, permits app-based companies – including DoorDash, Uber, and Lyft – to classify their workers as independent contractors, rather than employees.

Protest Demands and Participants

Approximately 50 DoorDash workers, associated with the advocacy groups We Drive Progress and Gig Workers Rising, participated in the protest. They arrived at Xu’s home in San Francisco’s Pacific Heights neighborhood in a caravan.

The group’s demands included greater transparency regarding tips, a minimum wage of 120% of the local standard – roughly $17 per hour – an end to unfair account deactivations, and provision of free personal protective equipment (PPE). They also requested adequate compensation for vehicle and equipment sanitization.

DoorDash’s Response

A DoorDash spokesperson communicated to TechCrunch that the company values the concerns and feedback of its drivers. They stated a commitment to ongoing dialogue and direct engagement with the delivery community.

However, the spokesperson also asserted that the protesters do not represent the majority of California DoorDash drivers. They cited a figure of 91% of dashers who prefer remaining independent contractors, and highlighted the overwhelming voter support for Proposition 22.

Benefits and Protections Under Prop 22

DoorDash maintains that Proposition 22 has already addressed many of the concerns raised by the protesters. The law provides for workers to earn 120% of the local minimum wage for active hours, in addition to receiving 100% of their tips. It also guarantees free PPE and access to healthcare funds.

Concerns Regarding Pay Structure

Drivers express dissatisfaction with being compensated only for “active” time – while actively picking up and delivering food – rather than for time spent online and awaiting assignments. They argue this leads to insufficient earnings.

Many drivers rely heavily on tips to reach a livable wage, which they believe should be a supplement to base pay, not a necessity to make ends meet given DoorDash’s current pay structure.

DoorDash contends that paying only for engaged time allows drivers the flexibility to utilize multiple delivery applications simultaneously, or to handle personal errands while remaining available for work.

Mileage Reimbursement and Driver Experiences

Proposition 22 also stipulates a reimbursement of 30 cents per engaged mile. However, drivers question the accuracy of this reimbursement, stating it doesn’t always reflect reality.

Rondu Gantt, a driver for DoorDash, Uber, and Lyft for two and a half years, reports a base pay from DoorDash as low as $3 per hour. He estimates that 40% to 60% of his income comes from tips.

While this model resembles the restaurant industry, where servers and bartenders can earn substantial income through tips, Gantt argues it’s unsustainable for delivery drivers due to a less robust tipping culture.

Financial Strain on Drivers

“DoorDash keeps pay low to make it affordable for customers, but it becomes unaffordable for the driver,” Gantt explained to TechCrunch. He cited the expenses of vehicle ownership, maintenance, parking, and fuel as significant financial burdens.

Gantt recounted working 30 hours in a week and earning only $405, equating to $13.50 per hour – below the minimum wage.

Safety Concerns and Essential Worker Status

Drivers have also faced pressure to work in hazardous conditions, exemplified by images of delivery personnel working during Hurricane Ida in New York City.

Over the past two years, DoorDash drivers have been classified as essential workers, exposing themselves to health risks while providing services during the pandemic.

PPE and Safety Support

Gig Workers Rising claims DoorDash workers have received minimal safety support, with some reporting reimbursements as low as 80 cents per day for cleaning and sanitizing equipment.

A DoorDash spokesperson stated that workers have been eligible for free PPE since the pandemic’s onset, with information available online for weekly supply orders.

The Need for Employee Status

A spokesperson for Gig Workers Rising argued that gig work currently lacks flexibility. Drivers are dependent on demand fluctuations and would benefit from the security of employee status, including healthcare and sick leave.

With Proposition 22 deemed unconstitutional, the spokesperson believes it should no longer be in effect, alleging that gig corporations are deliberately disregarding the ruling.

DoorDash’s Legal Position

DoorDash maintains that Proposition 22 remains the law and anticipates appealing the ruling to uphold its validity.

Seeking Fair Compensation

Gantt expressed that he doesn’t necessarily desire employee status, but seeks fair compensation for his work.

“Minimum wage is unacceptable, considering the costs and dangers involved,” he stated. “And even after taxes, the pay often falls below minimum wage.”

Pay Breakdown Analysis

TechCrunch reviewed a DoorDash worker’s dashboard from the week of July 12 to July 19. The driver earned $574.21 for 53 deliveries, with $274 coming from customer tips.

“Active time” totaled 14 hours and 21 minutes, while “dash time” – including waiting for assignments – reached approximately 30 hours.

The driver’s “guaranteed earnings” were $300.21, calculated to ensure 120% of minimum wage for active time. Base pay amounted to $257.62, with an additional $42.59 added to meet guaranteed earnings.

Hourly pay based on “active time” was approximately $21. However, based on “dash time,” it was closer to $10.

Impact of Taxes

Independent contractors are typically advised to set aside around 30% of their income for self-employment tax (15.3% of taxable income), federal income tax, and potential state income tax.

After taxes, the driver’s total pay for 30 hours of work, including $274 in tips, would be around $402, or $13.40 per hour.

Transparency of Tips

Drivers at the protest voiced concerns about tip transparency. While they can see cumulative weekly tip earnings and individual order tips, they question whether they are receiving the full amount customers intended to tip.

DoorDash assures that drivers receive 100% of their tips.

Past Legal Issues Regarding Tips

In November, DoorDash settled a lawsuit for $2.5 million alleging the company misappropriated drivers’ tips. The suit, filed by Washington, D.C. attorney general Karl Racine, claimed DoorDash reduced driver pay by the amount of any tip received.

DoorDash denies the allegations, stating they relate to a former pay model discontinued in September 2019.

DoorDash’s Financial Performance

During the second quarter, DoorDash reported an adjusted EBITDA profit of $113 million, but an overall net loss of $102 million.

The protest included calls for CEO Tony Xu to “share the wealth.” In 2020, Xu was reportedly the highest-paid CEO in the Bay Area, with total compensation of $413.67 million, including salary and stock options.

DoorDash clarified that Xu has not yet received any of this compensation, which is contingent on the company significantly exceeding market expectations and achieving a 5x return over the next seven years.

The Value of Drivers

“We all work for money, and how that money is distributed reveals who is valued and who is not,” said Gantt. “It’s a clear indication of who matters.”

This article has been updated with additional information from DoorDash.