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What DoorDash pays, after expenses, and what’s happening with tips

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Re: What DoorDash pays, after expenses, and what’s happening with tips

#441

Post by eigenvalue »

scarface74 wrote: post #418
Lavery wrote: post #399

Earlier quoted context omitted.

The cost to Uber users is not the same as revenue to Uber corporate. Uber corporate revenue is net of driver pay.

You pay Uber and Uber pays drivers. Revenue by definition is money that Uber gets before expenses.

This is not how the actual GAAP accounting works for a company like Uber. The total the customers pay is referred to as bookings. There was a similar issue with Groupon when that was the hot stock of the day:

https://dealbook.nytimes.com/2011/09/23/groupon-changes-its-...

Re: What DoorDash pays, after expenses, and what’s happening with tips

#442

Post by gadabout »

Balanceinfinity wrote: post #419

It's a free country - the drivers can choose to take the assignments or choose not to. What they (and customers) are entitled to are accurate information so they can make choices about whether this is in their interest. It's easy to say "Door dash should pay more," (and they probably should), but that might cut customer usage by 40%, which means half of the people driving wouldn't be able to drive. The one thing that…

Curious, where does 40% come from?

Re: What DoorDash pays, after expenses, and what’s happening with tips

#443

Post by zaroth »

MuffinFlavored wrote: post #143
rahimnathwani wrote: post #124

Earlier quoted context omitted.

"why are people choosing to do this if it pays $0/hr?" The article explains this: "the DoorDash pay model appears aimed at having workers deliver food effectively for free in hopes of collecting tips."

does it say what that equates to in terms of net income per hour when it is all said and done?

Yes it does.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#444

Post by scarface74 »

boh wrote: post #429
scarface74 wrote: post #418

Earlier quoted context omitted.

You pay Uber and Uber pays drivers. Revenue by definition is money that Uber gets before expenses.

Uber does not pay drivers. Passengers pay drivers who pay Uber to use their platform (otherwise they'd be employees which Uber is fighting to avoid).

Uber paying drivers does not make the drivers employees. When I have worked as a software developer as a 1099 contractor and someone bought the resulting software, does that mean that the customer who bought the software was paying me? Would the payment for the software be counted as revenue for the company?

When I was a part time fitness instructor, I taught at corporate gyms where the employees had free memberships. I got a 1099 every year from the gym. Did the employees pay me? Would that be an expense of the corporation?

Re: What DoorDash pays, after expenses, and what’s happening with tips

#445

Post by [deleted] »

wolco wrote: post #213
franga2000 wrote: post #199

Earlier quoted context omitted.

Is there any other country other than the US where paying service workers below minimum wage is legal or acceptable? I've been around a fair bit of Europe and surroundings and I've never encountered the US system.

Canada, Africa and the Middle East.

[deleted]

Re: What DoorDash pays, after expenses, and what’s happening with tips

#446

Post by beatgammit »

smt88 wrote: post #123
chii wrote: post #115

Earlier quoted context omitted.

> you basically just "borrowed" money from your vehicle. so wouldn't it then make more sense to just sell the vehicle for $10003, then place that money in an interest earning asset like a bond, rather than "borrow" from the value of the vehicle?

Most Americans can't manage daily necessities (groceries, childcare, doctor's visits, etc.) without a car. Then maybe you ask why they don't have a cheaper car. Generally, a cheaper car costs far more to maintain. The total annual cost of ownership of a 2-year-old Camry is far lower than a 10-year-old Camry. But to get that lower cost, you have to temporarily convert more of your money into that car asset. End result…

I think it's more that dealerships usually carry newer cars, and it's a lot easier to get qualified for a loan at a dealership than for a private car sale (or at least it's perceived that way). The types of people doing Uber or Doordash aren't the type that can pay cash for a car (Uber even restricts you to newer cars last I checked).

A lot of people see car payments as being "normal" and a necessary expense. I have never had a car payment, so adding $200+/month is not something I'm going to consider. However, many people don't have any real cash in savings[1] 40% would struggle with an unexpected $400 expense, 20% don't have $400 in the bank. Personally, I keep at least $500 in cash at home, and I keep enough to cover my single largest "expected" sudden expense (e.g. replace my car), or last at least 3 months without pay (6 months right now since I'm a contractor), whichever is bigger.

The culture around debt is truly alarming. People pay $20k+ at 4+% to drive a car that may be more "reliable", when they could pay ~$10k at 0% (or enter your opportunity cost here for keeping cash) for a car that's approximately as reliable over ~5 years. If both follow the same depreciation curve, buying an older car with cash is way better than buying a newer car on credit. My advice is: buy a cheaper car, pay yourself whatever the car payment would've been on the more expensive car, and use that fund to replace/repair your cheaper car (never pay more than 50% of the value of your car for a repair). I would be very surprised if the majority weren't better off buying older cars with cash than newer cars with credit.

- [1] https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...

Re: What DoorDash pays, after expenses, and what’s happening with tips

#447

Post by rjkennedy98 »

cc439 wrote: post #71
marcell wrote: post #30

> “These orders don’t pay for our expenses or our time. We actually lose money when we take those orders. If I pick up an order that is 10 miles away and deliver it 6 miles I’m traveling 16 miles for a $3 order — so I have lost money. I’m in the negative when I account for gas, wear and tear, and other expenses. Not to mention my time.” This begs an obvious question: why are people choosing to do this if it pays $0/h…

"However, if a worker rejects too many jobs too frequently, they may receive fewer job offers as a result." They take those jobs because they lose all access to the chance of profitable jobs otherwise. The people working for door dash aren't exactly the sort of person with the ability to fully understand probabilities and statistics either. I'd say it's fair to assume their business model works by bullying the same p…

> The people working for door dash aren't exactly the sort of person with the ability to fully understand probabilities and statistics either

Yet the same person featured in the article has 3 children. I just don't understand why we allow this. China at least had the 1 child policy so there is only so much damage an incompetent person can do.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#448

Post by eigenvalue »

mekkkkkk wrote: post #357
2rsf wrote: post #192

Earlier quoted context omitted.

Yes we can, that's how it works in Sweden and AFAIK in many other European countries. Tips are not expected, and are meant only for extraordinary service. The base pay is decent and so are the benefits like vacation, pension etc.

That's barely the case any more. The amount of gig-economy wage slavery in all countries is sky rocketing. No country is really spared. You can find people everywhere who are juggling e-scooter, ride share, food delivery etc jobs at an excruciating schedule for barely any money. In Sweden in particular, it seems that the waves of refugees in recent years have only fueled this.

If those refugees are grateful for the opportunity to work and earn, and are in much better conditions now than in the countries they fled, and also wouldn't necessarily qualify for higher wage jobs because of language/cultural/educational barriers, why is that so bad? And if it allows more prosperous Swedes to enjoy the convenience of food delivery for a cost that they think is worth it, is that so terrible? To me, the market is working here. People are getting what they want. If these companies didn't exist, both customers and workers would be doing the next most attractive thing to them, which would be by definition worse from their viewpoints. Customers would be wasting their valuable time driving to get food or eating less appealing food at home, and workers would get some other menial, low paying job. If the only available jobs had a high minimum wage and benefits, then they would simply go unemployed and become wards of the state.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#449

Post by jotakami »

joeblau wrote: post #426
mabbo wrote: post #411

Is anyone else starting to get the feeling that "gig economy" is this generation's "multi-level marketing"? People who don't know any better get sold on the "be your own boss, earn what you put in" concept. Reality doesn't match expectations. The people work their asses off and wind up with a lot less money than they expected because costs and actual spent time aren't taken into account. The people they're working fo…

These businesses could still survive, but prices are going to have to start raising as subsides (Private Equity mainly) pull back. The next question will be, is the $6 dollar burger still worth it when it costs $14 to deliver?

Nope. Last-mile, on-demand delivery will never be economically viable if humans have to be paid to do it. There’s just not enough economic value there to compensate a human for their time.

Sorry I should qualify that statement. Obviously for certain niches it has been viable for a long time (e.g. pizza delivery) but it seems like delivery is already baked into (pun intended) that business model. Perhaps it only works with the “ghost kitchen” model which gets rid of the overhead of an eating area and waitstaff.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#450

Post by scarface74 »

boh wrote: post #421
scarface74 wrote: post #389

Earlier quoted context omitted.

How could cutting drivers pay without cutting prices to increase demand raise revenue ? It would raise profit possibly or in Uber’s case reduce losses.

They increased their share of the passenger revenue, taking a greater percentage. Uber defines drivers as consumers of their app, not employees.

And on their P and L they also count as expense “driver incentives” where they pay drivers more than what riders pay for a ride.

For any less shady business, drivers would be considered contractors for Uber. Uber is merely trying to get around riders being considered employees.

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