Doordash
| Basic information | |
|---|---|
| Founded | 2013 |
| Type | Public |
| Industry | Online Delivery |
| Official website | https://www.doordash.com/ |
DoorDash was founded in June 2013, initially starting as PaloAltoDelivery.com before rebranding to Doordash. The company was founded by three Stanford students Tony Xu, Andy Fang, and Stanley Tang. Its focus is delivery on a wide variety of items, some items include fresh meals from nearby restaurants, groceries, convenience store items, OTC (Over the Counter) medicines, flowers, etc... This service mainly operates in locations within the U.S. (United States), Canada, and Australia.
Consumer-impact summary
Over the years of operation DoorDash has found itself in many controversial consumer and workers violations. Some of the most notable being:
- Withholding dashers funds (up to weeks or months) for delivering orders
- Lack of Business transparency especially with delivery fees confusing the consumer
- Exposing millions of sensitive dashers and company information in a breach
- Adding restaurants to their platform to order without the business's consent
- Using driver tips to cover the cost of other deliveries
- Taking advantage of financially challenged consumers by using BNPL (Buy Now Pay Later) services
- Subsidizing Dashpass subscriptions by passing commission rates onto business's
- Multiple lawsuits due to unfair business practices
Incidents
Withholding funds for contracted drivers
According to Doordash,
"Dashers get paid on a weekly basis for all deliveries or tasks completed between Monday - Sunday of the previous week (ending Sunday at midnight local time). Payments are transferred directly to your bank account through Direct Deposit and usually take 2-3 days to show up in your bank account, so payments will appear by Wednesday night."[1]
Even though they are treated like contractors they are still payed within a weekly basis instead of a quota based system. Many users who contract with Doordash need funds quickly to be able to cover daily expenses. This puts the dashers in a tough spot relying on cash tips if any to continue to get by until they are able to retrieve their weekly pay. However Doordash has already thought of this and created Fastpay.
"Fast Pay allows Dashers to cash out their earnings daily for a small fee of $1.99. This means that Dashers can receive their earnings on demand through DoorDash, rather than waiting for their weekly direct deposit or using a third party service."[1]
By holding holding dashers funds they are incurring free interest on the money by not paying out the dasher as soon as a delivery is completed. By taking advantage of desperate workers they can make more money off of the original transaction.
Charging users multiple unclear "fees" for delivery[2][3]
Data breach exposing millions of dashers and company info[4]
Adding restaurants to their platform without other business's consent[5][4][6][7]
Pocketing driver app tips to payout other dashers[2][8]
Using BNPL services to target the financially challenged consumers[9]
Using Dashpass subscription model to surcharge business's on order commissions[10]
Settling and pending lawsuits due to unlawful business practices[4]
Products
Dashpass (2018 - Present)
A premium program offered by Door Dash. This program offers free delivery on orders greater than $12 along with reduced service fees for deliveries. By paying the subscription price Doordash advertises this program as a cost saving measure for consumers that use their app frequently. This offer however has been subject to a variety of criticism. One of the more popular cases being hit with a cease-and-desist letter from DC attorney general for charging more than 15% on commissions to make up the losses of the companies free delivery policy with Dashpass.[10]
See also
References
- ↑ 1.0 1.1 "When do Dashers get paid?". Doordash. 2025-04-08. Retrieved 2025-04-08.
{{cite web}}: CS1 maint: url-status (link) - ↑ 2.0 2.1 Glenn, Lindey (2025-03-31). "DoorDash's $1 BILLION Lawsuit: Exposing DoorDash's Predatory Business Model". Youtube. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ Mayer, Chloe (2023-06-09). "DoorDash Faces $1B Lawsuit Over Delivery Fees: 'Dupes Naive Consumers' - Newsweek". Newsweek. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ 4.0 4.1 4.2 "DoorDash - Wikipedia". Wikipedia. 2025-04-08. Retrieved 2025-04-08.
{{cite web}}: CS1 maint: url-status (link) - ↑ Coban, Erkin (2025-04-08). "DoorDash Fees and Commissions for Restaurants: Detailed 2025 Guide - Restaurant Success Blog | Menuviel". Menuviel.
{{cite web}}: CS1 maint: url-status (link) - ↑ Pershan, Caleb (2020-01-29). "Delivery Apps Keep Adding Restaurants Without Their Consent - Eater". EATER. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ Settembre, Jeanette (2020-01-21). "DoorDash, Grubhub skewered by small restaurants for posting menus without permission | Fox Business". Fox Business. Retrieved 2025-04-09.
{{cite web}}: CS1 maint: url-status (link) - ↑ Calvario, Liz (2025-02-25). "DoorDash Settlement: Millions to Be Paid to Drivers For Pocketed Tips". TODAY. Retrieved 2025-04-08.
{{cite web}}: CS1 maint: url-status (link) - ↑ Steinberg, Brooke (2025-03-24). "DoorDash now offering eat now, pay later payments through Klarna". New York Post. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ 10.0 10.1 Kelso, Alicia (2020-12-07). "DoorDash hit with cease-and-desist letter from DC attorney general | Restaurant Dive". Restaurant Dive. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link)