DoorDash increases NYC delivery fees following new minimum wage rules

DoorDash customers in NYC will notice a new fee tacked onto their bill when they purchase food for delivery through the app. The company has started charging users $2 more for deliveries in NYC as a response to the city’s new minimum wage law, a spokesperson has confirmed to Business Insider. It warned users back in December that the new minimum pay rate, which it called “ill-conceived” and “extreme,” will have “significant consequences for everyone” who uses its platform and will “force [it] to raise fees for orders.” Other major cities implementing a minimum pay rate for app-based deliveries will also be affected. Seattle customers, for instance, were recently hit with new fees worth 10 cents to $3.40 order.

Under the new regulations, services like Uber, DoorDash and Grubhub will have to pay workers at least $18 an hour. DoorDash has chosen to pay drivers $29.93 for every active hour only, which means they’re unpaid for the time they spend waiting for orders to come in. When the company published its response to Seattle’s new rules, it said it was going to reduce the suggested tip amount for each purchase “in order to better balance the impact of these new costs and provide the best experience for consumers.”

Customers can still tip any amount they want, but they may be less inclined to tip as much as before due to the added fees. That’s one possible direct impact to drivers, since as DoorDash notes in its announcement, they get 100 percent of customers’ tips. That hasn’t always been the case. Back in 2019, news reports exposed the company’s practice of pocketing tips and using that money to pay for drivers’ guaranteed fees, which should’ve come from DoorDash itself. The food delivery service only introduced a new earnings and tipping policy that ensures drivers are getting their tips shortly after those reports came out.

DoorDash customers in NYC will notice a new fee tacked onto their bill when they purchase food for delivery through the app. The company has started charging users $2 more for deliveries in NYC as a response to the city’s new minimum wage law, a spokesperson has confirmed to Business Insider. It warned users back in December that the new minimum pay rate, which it called “ill-conceived” and “extreme,” will have “significant consequences for everyone” who uses its platform and will “force [it] to raise fees for orders.” Other major cities implementing a minimum pay rate for app-based deliveries will also be affected. Seattle customers, for instance, were recently hit with new fees worth 10 cents to $3.40 order.

Under the new regulations, services like Uber, DoorDash and Grubhub will have to pay workers at least $18 an hour. DoorDash has chosen to pay drivers $29.93 for every active hour only, which means they’re unpaid for the time they spend waiting for orders to come in. When the company published its response to Seattle’s new rules, it said it was going to reduce the suggested tip amount for each purchase “in order to better balance the impact of these new costs and provide the best experience for consumers.”

Customers can still tip any amount they want, but they may be less inclined to tip as much as before due to the added fees. That’s one possible direct impact to drivers, since as DoorDash notes in its announcement, they get 100 percent of customers’ tips. That hasn’t always been the case. Back in 2019, news reports exposed the company’s practice of pocketing tips and using that money to pay for drivers’ guaranteed fees, which should’ve come from DoorDash itself. The food delivery service only introduced a new earnings and tipping policy that ensures drivers are getting their tips shortly after those reports came out.