DoorDash: Tips (1)

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I recently received a question on Twitter about what percentage DoorDash customers typically add to their order as tips, which is the third component of each order’s pay (after base pay and peak pay), and is mostly (but not entirely) invisible to workers until after an order has been completed.

This is a question that’s literally impossible to answer on a retrospective basis, for two complicated reasons, so I designed a brief experiment to calculate it in real time, and am happy to share the results today.

Methodology

There are at least 4 different “Types” of DoorDash orders, which I’ll explain in more depth in a future post, but can briefly summarize here:

  1. Orders originating with DoorDash. These are “classic” DoorDash orders where you place your order in the DoorDash app, and DoorDash has completely visibility of both menu items and prices.

  2. Orders originating with the merchant. I believe these orders are created when you order delivery through a merchant like McDonalds or Sweetgreen and they foist the order off on DoorDash (or one of their other delivery partners). Here, DoorDash does not see or share the contents of the order or the price customers pay the merchant.

  3. Red Card orders. These are orders where the worker uses a special debit card to physically pay for an order in-store. The worker sees the items in the order, but uses the Red Card to pay whatever retail price the store charges, and does not see how much the customer is charged for them.

  4. Cash on delivery orders. I currently have this feature disabled, but my understanding is it allows workers to pay for orders with their own money at the merchant, then be reimbursed by the customer in cash when the order is delivered.

For the purposes of my study, I used exclusively the “classic” order Type 1, for the simple reason that this is the only order Type which allows you to see, in advance, the contents of an order and the price paid by the customer. Over the course of a few days, I set out to track 10 Type 1 orders, the retail price of the contents, and the final tip left by the customer. I ultimately forgot to sign off and accepted an 11th order, so I decided to include it as well, although you can rerun the calculation excluding that tip ($3 on a $30.56 McDonalds order).

One reason this is frustrating, and why I limited the number of orders I’d study, is that the contents and price information are only visible for the order you are currently delivering, only while you are delivering it, and are buried several menus deep, making it impractical to do this at any scale (at least on a volunteer basis!).

During the study period (Friday, September 30 and Saturday, October 1, 2022) I accepted every order I was offered (which included several Type 2 orders excluded from the study) in order to prevent the sample being biased towards higher-paying, higher-tipped orders.

Data

With that out of the way, here are the results of those 11 Type 1 orders:

As you can see, a majority (6) of my Type 1 customers tipped between $2 and $3.50, with tips of $2, $3, and $5 being equally represented in the sample.

Of the 9 customers who tipped, the average tip was $3.56, and the average tip rate was 13.3%.

Interestingly, there is no correlation between the price of an order and the tip rate, which is strongly suggestive that most customers are not following a customary rule based on order value, but instead tip a fixed amount on every order regardless of the order’s contents. Customers’ tipping decisions may be based on other factors, like ability to pay (customers who can charge tips to their employer or receive monthly credit card statement credits for DoorDash orders may have a higher propensity to tip), perceptions of cost or inconvenience incurred by workers (customers in less convenient and more difficult to access homes and offices may feel an obligation to compensate workers at a higher rate), or a perception that tipping is either pro-social or anti-social behavior. Additionally, if orders placed without tips are regularly refused or delayed, there may be an additional feedback mechanism encouraging workers to gradually increase the amount of the tip they add until their food begins to be delivered more promptly or by more skilled or experienced workers.

Conclusion

I hope this was an interesting, albeit limited, snapshot of the tipping behavior of DoorDash customers in my area. I’m happy to run more experiments like this in the future, so as always feel free to leave any questions, comments, or suggestions for future studies in the comments.