Feb 25, 2021 - Economy

DoorDash says delivery drivers are earning more after Prop. 22

Illustration of a burger, drink, and fries, sitting on a cell phone as if it were a tray

Illustration: Sarah Grillo/Axios

Food delivery company DoorDash says that in January, its couriers in California netted on average 30% more in hourly earnings than they did in 2020 prior to the passage of Prop. 22 in November.

Why it matters: Much of the companies' pitch to voters was that Prop. 22 — which allowed gig economy firms to treat workers as contractors rather than employees — would translate to higher earnings for workers, but has faced skepticism from some drivers and critics of the industry.

  • Since then, some gig workers for various companies have reported decreases in earnings.

By the numbers: All figures are regional average hourly earnings while completing deliveries, including tips.

  • Bay Area: more than $36 per hour.
  • Los Angeles and San Diego: more than $33 per hour.
  • Sacramento: more than $32 per hour.

Be smart: These hourly figures factor in the $0.30 per mile reimbursement mandated by Prop. 22 — a rate that is nearly half of the IRS guideline of $0.57 per mile.

  • It also doesn't include other expenses like supplies many couriers have been using for safety during the pandemic (though DoorDash does make some supplies like masks and hand sanitizer available to couriers).
  • The company also declined to share the median hourly earnings in these markets, though head of policy Max Rettig says they're not too different from the mean.
  • And while DoorDash tells Axios that it hasn't seen any significant changes in the average number of hours couriers work per week, the number of deliveries they perform per hour or the bonuses offered to couriers, it's hard to know whether they're performing jobs for other services to top up their earnings, for example.
  • DoorDash has also increased its service fee to customers in California, which can impact more price-sensitive customers' behavior, including tipping.

What's next: DoorDash is announcing its first quarterly earnings as a public company after market close later today.

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Editor's note: The story has been updated to clarify that DoorDash does provide some safety supplies to couriers.

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