Intro - How does DoorDash work for Dashers?
This two-part blog post has me taking a break from analyzing and writing about rideshare industry news articles and instead providing a primer (preparation for what comes next) to help my readers get a quick start delivering for DoorDash.
When I decided to take on this experiment, the main reason I decided to explore the DoorDash sign up process and not one of the other major Gig economy delivery companies was a close friend started driving for DoorDash a few months before me and he was sharing some extremely interesting earnings success stories.
Doordash also made sense to me because as a Rideshare industry analyst it had not escaped my attention that Doordash was the biggest Gig economy food delivery service as evidenced in part by their participation with Uber and Lyft in a currently-in-the-news ballot initiative in California as I detailed in my last blog post.
My regular readers know my blog posts tend to be heavy with facts and not just opinion pieces. I enjoy researching and providing readers with relevant, fact-based information that is simple to understand.
By “relevant” I mean my goal is always about you… regular people who are interested in improving their finances by participating in the Gig economy.
DoorDash market share
This was the first time I’ve really dug into the numbers related to the Gig economy delivery phenomenon… and what I found is the numbers are respectable with lots of room for future growth.
Exact total revenue numbers are hard to come by because, unlike the rideshare industry, the Gig economy delivery business (online delivery) is more fragmented, certainly restaurant food delivery is #1… but it is possible to get almost anything delivered from almost any local business by an Independent contractor Gig economy driver.
From my research it looks like in 2019 the general Gig economy delivery market revenue in the United States was around $23 million dollars.
So really “chump change” compared to the 2019 U.S. rideshare transportation market of over 60 billion dollars revenue.
But that doesn’t mean there’s no “gold in them thar hills” for you and me delivering restaurant food; groceries; etc. using smartphone applications like the one offered by Doordash.
That’s what this two-part blog is about… a quick start primer toward becoming a Gig economy delivery driver.
Food delivery service with Doordash is expected to grow about 5% every year going forward and you can bet DoorDash will be competing with the other Gig economy delivery businesses to capture as much of it as they can.
To be really honest I suspect I find these revenue reports and statistics more interesting than you do… don’t worry my main goal with this writing is to provide quick-start directions for anyone looking to give Doordash delivery a try.
Before moving on I do want to make the point that Gig economy delivery driving doesn’t require anywhere close to the same volume of drivers compared to the rideshare industry market and I suspect someday I will return to rideshare transportation as my primary source of Gig economy income.
For now, my personal DoorDash experiment will continue for a while and in the past two months I’ve completed over 800 DoorDash deliveries.
To date most of my DoorDash driver experiences have been good.
DoorDash Independent contractor
In March of 2020 I exercised my status as an Independent contractor and completely stopped doing passenger trip “gigs” for Uber and Lyft and went “all in” on a new-for-me experiment with DoorDash delivery.
Because I am an Independent contractor, I didn’t have to ask permission from a boss or worry that my “job” completing passenger trips for Uber and Lyft will not be there when I’m ready to go back.
I simply stopped turning on the Uber and Lyft applications. I completed the DoorDash sign up process and then started delivering for DoorDash.
I take my status as an Independent contractor seriously and always think of myself as running my own small business. In my way of thinking this point of view is critical to enjoying success as a Gig economy worker.
When I read Ridesharing driver s complaining online saying things like: “Uber doesn’t pay me enough” I often wonder if they understand they aren’t Uber employees…
Uber, Lyft, and other Ridesharing company drivers didn’t apply for a job… they didn’t get interviewed by company employees and chosen as the best candidate or even chosen as a viable candidate… just like the DoorDash sign up process is exactly the same for every driver.
The point being Ridesharing drivers and Gig economy delivery drivers are “hired”, they “qualify” based on exactly the same criteria… in my opinion this fact alone means Gig economy drivers are correctly classified as Independent contractors and not employees.
For more on this point check out my blog Do Lyft and Uber Drivers Own a Business?
I wonder why these sometimes very vocal and very negative Uber drivers choose to only complete passenger trips for Uber?
I’ll never understand why they treat themselves as if they were Uber employees when it’s so blatantly clear they are not.
I do understand why they are complaining… because they choose to be confused about what it means to make the choice to do Independent contractor work.
Competitors - Alternatives to DoorDash
I’ve explained why I chose DoorDash for my Gig economy delivery driving experiment.
You may be wondering about the other Gig economy delivery companies… wondering if it makes sense for you to follow the DoorDash sign up process without exploring the other options?
If you’re wondering exactly this, I commend you… turns out while DoorDash is the biggest U.S. meal delivery company with about 35% of the total market they may not be the biggest company in your city/market.
Grubhub has a bigger segment of the total market in some cities and of course there are other players like UberEats and Postmates.
I’ve chosen to focus in on an experiment as a full-time hours DoorDash driver and the only reason I’m writing this article now instead of months from now when I have thousands of lifetime DoorDash deliveries is my team at Rideshare Business Guide encouraged me to share my experiences and help others with the DoorDash sign up process.
From my point of view, I’m not an “expert” delivery driver, at least not yet… I’ve barely gotten started delivering for DoorDash completing only 800 deliveries working full-time hours over the past two months.
In contrast to date I’ve completed over 15,000 Uber and Lyft passenger trips and I’d completed over 7,000 passenger trips before I started writing two books on the business of being a Ridesharing driver and over 10,000 trips before launching the Rideshare Business Guide website.
Back to my DoorDash orientation or quick start guide for new Gig economy delivery drivers.
Can anyone be a DoorDash driver?
Where I live, in Denver Colorado, “the bar” for becoming a DoorDash driver is quite a bit lower compared to Rideshare passenger driving.
In Colorado there are no rules or regulations regarding what kind of vehicle is required to complete delivery trips. Makes sense because the only person who will be in your vehicle is you.
The rules might be different in other U.S. states but the DoorDash website will show new drivers how to become a driver and deliver with DoorDash wherever they plan to drive.
Having a DoorDash Driver Referral Code isn’t required but using one will ensure that you get the best DoorDash driver promo.
Follow the link above and you’ll begin the DoorDash sign up process using my Driver Referral Code.
Do you need special insurance for DoorDash?
Obviously, the vehicle you use should be legal in every way for personal driving and I highly recommend communicating with your personal vehicle insurance company and getting a “Rideshare Endorsement” or whatever your insurance company calls coverage for earning income with your vehicle.
My Rideshare Endorsement from USAA costs me an additional $19 per month… a small price to pay to make sure I’m covered if I have a vehicle insurance claim.
Having appropriate insurance coverage is very important because if you’re earning income using your vehicle and only have personal insurance coverage you are probably violating the terms of the contract.
If you have a claim it likely won’t matter if you were engaged in earning income when the event happened… if you violated the terms of your policy at any time the insurance company claims adjuster will very likely deny your claim and this could ruin your personal finances for a very long time.
DoorDash sign up process
So… when I decided to launch my DoorDash driver experiment I went to the DoorDash website and clicked “Sign Up” at the top, right-hand corner of the webpage.
I also entered my friend’s DoorDash Driver Referral Code to ensure I got the best DoorDash driver promo and potentially earn a bonus for myself and my friend.
If you use my DoorDash Driver Referral Code you will benefit from having direct access to me as a resource. We can communicate in live phone conversations and/or through email or text messages.
Having a seasoned professional available as a resource is invaluable when starting a new business venture.
DoorDash vehicle requirements and choices
At least in Colorado the DoorDash sign up process doesn’t ask what kind of vehicle you plan to use. This means you can use a vehicle you already own or any other vehicle.
If you don’t have access to a vehicle yet I highly recommend getting a copy of Driving for Uber and Lyft - How Much Can Drivers Earn? before thinking about renting, leasing, or purchasing a new or used vehicle with the intention of using it for earning Gig economy income.
Vehicle ownership is the 2nd largest purchase most of us will make in our lives. For most of us the only larger purchase is homeownership.
Thoroughly doing your homework before committing yourself to a vehicle is very important!
DoorDash background check
DoorDash and all the other Gig economy delivery companies are going to do a criminal background and driving record check. There’s no charge for the checks and there’s no getting around this requirement.
If you’re wondering specifically what would disqualify someone from becoming a driver I suggest just following the DoorDash sign up process and seeing what happens.
Attempting to sign up for DoorDash or another Gig economy delivery “job” requires no initial investment and if something in your driving or personal background disqualifies you “no harm, no foul” you can move on to other income-earning ventures.
Other requirements - Vehicle safety - Physical fitness
In Colorado Ridesharing drivers signing up to do passenger transportation must pass a basic physical examination and their vehicle must also pass a basic safety examination. This process is repeated every year they continue to be Gig economy passenger transportation drivers.
For Gig economy delivery drivers (like DoorDash) in Colorado there are no annual requirements for physical fitness or vehicle safety exams.
I would caution that if climbing the stairs to a third-floor apartment is an issue for you physically then delivery driving is not for you.
When delivering for DoorDash there’s no way to know what kind of home the delivery is going to before accepting a delivery request so no way to pick and choose based on physical requirements. Trust me I don’t like delivering to third story, walk-up apartments and would be tempted to decline a delivery request if I knew in advance.
Personally in the past two months I’ve experienced the reality that delivery driving is quite a bit more physical compared to rideshare passenger driving.
On a typical Rideshare driving day the only time I regularly had to get out of my vehicle was to open my vehicle’s hatchback and help passengers with their luggage or occasionally groceries or other cargo.
My elderly friend who also drives for Uber and Lyft doesn’t get out of his vehicle at all during his driving days because he is not physically fit enough to help passengers with anything heavy.
Especially during my first couple weeks of full-time hours delivering for DoorDash I was well-aware that getting in and out of my car at least twice for every delivery was more physically taxing. At the end of my days I felt tired in ways I’d never experienced completing only passenger trips.
On a positive note climbing apartment stairs has been good physical therapy for my “trick” knee and I realized that for me more activity equaled less overall pain and my knee is feeling much stronger now and more flexible.
DoorDash hourly wage
Now for a really important topic…
“How much can I earn?!!!”
or more to point
“How much can you earn?”
With my Rideshare passenger business (Lyft and Uber Technologies Inc) I’ve kept very careful track of my earnings and hours since the first day I got out on the road.
With the data collected from thousands of completed passenger trips I know without question how much I earn per hour of my time as an Uber and Lyft Ridesharing driver.
I turned my detailed hours and income tracking into a Rideshare Earnings Case Study which covers over two years of my Rideshare driving income results and is available for free by contacting me.
With my DoorDash driver experiment I’m not keeping careful track of my hours because delivery driving is not an apples-to-apples comparison to completing passenger trips with Uber and Lyft.
In my free Rideshare Driving Case Study, you’ll see that I consistently average around $24 per hour as a Ridesharing driver in the Denver, Colorado metro area.
As a DoorDash driver with over 800 deliveries and two months experience I’d guess that I am averaging about $20 an hour for my time.
DoorDash benefits - Working close to home base
One thing that is very different compared to Rideshare driving for Uber and Lyft is when I’m delivering for DoorDash I’m almost always staying close to home.
This means when I don’t have an active delivery request I’m often returning to my home, staying online waiting for my next delivery request.
I’ve cycled and folded laundry; cleaned the kitchen; checked email; worked on blogs; etc. while I’m still technically “at work” waiting for my next delivery request.
In sharp contrast with my extensive Rideshare driving experience (over 15,000 lifetime trips as a driver) after I leave my home it’s extremely rare that I am close to home again until I decide my Rideshare driving day is over.
As a Ridesharing driver I always start close to home but that first passenger trip takes me away from my home, sometimes far away, 30 minutes’ drive or more so it doesn’t make sense to drive back home when my next passenger trip request is probably minutes away from my current location.
This is the primary reason I’m not keeping careful track of my DoorDash delivery hours so I don’t have a satisfying “average X per hour” number.
I’ll get more specific about how much money you can make with DoorDash in a moment… for now I’ll just say that earnings vary and sometimes by a lot. Most deliveries I earn at least $6 but last night I earned $47 for a single delivery.
My $47 “great white whale tale” is by far the highest I’ve earned for a single delivery. $29 was the customer’s tip. $10 was a DoorDash driver reward, not sure why but I did have to drive almost 20 minutes from my current location to the restaurant. The rest of the $47 was DoorDash Base Pay and a $2 per delivery DoorDash driver incentive.
Obviously I’m not going to earn anywhere close to average $47 per delivery and as an experienced data analyst I know I would have to throw out outliers like this one in order to compute meaningful data… either an average per hour or an average amount per delivery.
And even if I did compute a number it wouldn’t be useful for your experience, maybe interesting but not particularly useful from a business perspective.
I will say that multiple times per week I’ve been getting customer tips of $10 and more, with enough frequency to say that I get at least one really interesting/exciting customer tip nearly every day I drive.
My main point on computing an average DoorDash hourly wage is this… if I had thousands of lifetime completed deliveries and detailed data collected I could produce an hourly average income estimate… BUT EVEN THEN the numbers would be useful only for drivers who were working in approximately the same part of Denver Colorado where I work.
As I gain more insight into the DoorDash new pay model I will share tips on how to maximize how much money you can make with DoorDash.
Every city and market will be a little different
Every city/market is going to be a little different.
And every part of a given city is going to be a little different.
For example, if I live near downtown Denver I’d be closer to a larger number of restaurants and a denser population of customers. Also true if I lived near downtown Denver parking at restaurants and customer locations would be more of an issue.
Other factors would likely affect the amount of income I would earn in a given amount of time.
I think I live in a kind of “sweet spot” for my city regarding how much I earn as a DoorDash delivery driver. I live in what is essentially one of the suburbs of Boulder, Colorado.
Where I live my neighbors sometimes joke that we’d live in Boulder if we could afford to but since we can’t we live “In the Ls” meaning Louisville, Lafayette, and Longmont. Each city is cheaper than Boulder but there are much cheaper places to live in the greater Denver area.
Since living in “The Ls” means more “bank for our bucks” from a housing perspective there are a lot of people living here I think have at least the perception of more disposable income compared to our peers who pay a lot more to live in Boulder proper.
More disposable income means more to spend on rideshare transportation and delivery services.
The goal of my experiment driving for DoorDash
When I started Rideshare driving in April of 2016 the primary question I had was:
“Can I earn similar or more income Rideshare driving with Uber and Lyft compared to my other available “traditional” hourly job opportunities?”
For my DoorDash driver experiment I have a different question:
“Can I fully replace/match my full-time hours Rideshare driving income by delivering for DoorDash?”
Two reason for the different question:
- In April 2016 I wasn’t sure I could earn similar income as a full-time hours Gig economy worker compared to the “traditional job” opportunities available to me.
- In March 2020 I am committed to being an Independent contractor Gig economy worker (not looking for hourly income “traditional jobs”) and since committed to the freedom and flexibility that come with being a Gig economy worker I am less concerned with how much I earn per hour… I’m more concerned with earning enough income to cover my personal and business expenses and for this experiment if I can completely replace my Rideshare driving income with DoorDash drivers pay.
Without going into a lot of detail most of what I am delivering for DoorDash is restaurant food so this Gig economy work occurs primarily during lunchtime and dinnertime hours.
As a Lyft and Uber driver I can drive anytime of the day or night knowing that most of the time in most parts of the greater Denver/Boulder area I will stay busy often completing one passenger trip after another for hours at a time.
How much does DoorDash pay?
As a Ridesharing driver working full-time hours (average 40 hours per week) I earn between $45,000 - $50,000 gross income per year. And if I wanted to work more than 40 hours a week I am free to earn more.
As a DoorDash delivery driver with a whole two weeks of experience (making fun of myself here) and just over 800 completed deliveries (again making fun of my newness) I believe I can replace/match my Rideshare driving income provided I do at least one of the following:
- Work essentially every lunch and dinner “shift” six or even seven days per week
- Work after dark
Currently I don’t log in to the DoorDash driver app until about 11 a.m. My thinking is I’m working the lunch shift and people are less likely to order lunch before 11 a.m.
From the time I wake up in the morning until 11 a.m. is my personal time.
If my children are staying at my house (currently doing online school at home) I stop delivering for DoorDash around 2 p.m. and go back online about 4 p.m.
Again, schedule freedom is part of the Independent contractor Gig economy work. When I decide I’m done I can “Pause Deliveries” while I’m completing my last delivery… I choose when to start and I choose when to end my work “shifts.”
Currently I stop delivering for DoorDash as the sun is going down. Finding the right house, and especially the right apartment building, is significantly harder after the sun goes down.
I started my DoorDash driver experiment after Daylight Saving Time so when I stopped transporting passengers for Uber and Lyft and started delivering mostly restaurant food it was getting dark around 8 p.m. and it gets a little later every night.
Delivering for DoorDash after dark
Months from now this won’t be true and I will have to make a choice. I may choose to stop delivering food sometime after it gets dark and switch to passenger trips… we’ll see.
Currently when my kids are at their Mom’s house, I typically stay online driving for DoorDash most of the day from around 11 a.m. to about 8-8:30 p.m.
When I take a few hours afternoon break, I typically earn $130-$150 gross income for the day although sometimes a little less.
When I stay online most of the day, I typically earn $130 – just over $200 dollars per day.
This works for me, for my personal life, as a full-time Gig worker delivering for DoorDash if I wanted one or two full days off every week, I would start a little earlier, say 10:30 a.m.; stay online all day long; and most importantly continue to complete deliveries after the sun goes down.
If I’m averaging $20 per hour and completing deliveries average 40 hours per week that’s something over $40,000 gross annual income.
I am prepared for after dark driving, I have my camping headlamp and a small but powerful flashlight in my car but so far what I’m doing is working for me and when I do work at dusk or a little bit after dark I always seem to get hard to find addresses.
Being a Gig worker and delivering for DoorDash as a part-time business venture makes a lot of sense. If part-time driving were my choice I would work toward defined income goals and not concern myself with how much I earned per hour of work.
I don’t recommend full-time hours delivery driving or Rideshare driving to just anyone. It takes discipline and patience to be 100% your own boss which I cover in detail in my book How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual.
DoorDash drivers - Gig workers - Independent contractors
Remember that Gig economy workers are Independent contractors and as such they are responsible for managing their own expenses and filing and paying the appropriate taxes.
There are deductible vehicle expenses and other business accounting practices that a new Independent contractor needs to understand.
My book Driving for Uber and Lyft - How Much Can Drivers Earn? details a simple step-by-step process for calculating the operating expenses for any vehicle (including estimating future maintenance and recovering the depreciating resale value of any vehicle.)
The book also covers Independent contractor tax filing and easy math to calculate driver “take-home pay” meaning know how much you should save for taxes and future vehicle expenses and how much you can safely spend on your bills or whatever income goal motivated you to become a Gig worker as a Ridesharing driver.
Use my DoorDash Driver Referral Code and you'll have direct access to me as a resource through phone conversations, email or text messages.
Having access to a seasoned professional is invaluable when starting a new business.
This completes part one of this two-part series.
Next week I will go into more detail about the DoorDash sign up process; new pay model; customer tipping; accepting and declining delivery requests; staying close to home or not; grocery delivery with DoorDash; flower delivery; and a whole lot more.
See you next week, Wylee.