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DoorDash Inc. will directly employ delivery workers for the first time as it jumps into the growing field of super-fast deliveries.
DoorDash
DASH,
on Monday began offering 10- to-15-minute deliveries in the New York City neighborhood of Chelsea, and will soon be followed by other launches as DoorDash seeks to mimic services offered by GoPuff and other younger rivals that are challenging the nation’s leading delivery app. Employee couriers will do the work, a different approach for a company that has spent millions fighting to continue classifying its millions of delivery workers as independent contractors.
See: The record-breaking $200 million fight to preserve the gig economy
In an interview with MarketWatch, DoorDash President Christopher Payne said the employee model makes sense for this new offering, but reiterated that the company continues to believe in the independent-contractor model for the majority of its delivery workers.
For ultra-fast delivery, “it’s a tight radius — the prep and pick time is very short,” he said. “Couriers will [also] be doing picking, stocking, customer service. That’s a difference from what we do on the Dashing side.”
DoorDash delivery workers, which the company calls Dashers, pick up food and other goods from restaurants and stores and are paid per delivery, not by the hour. Couriers for the new ultra-fast offering will be paid hourly, starting at $15 an hour, not including tips.
Payne acknowledged that “some of the Dashers we know want more work like this, they want employment. We feel like this will be a good option.”
See: How gig companies are seeking to rewrite states’ labor laws
DoorDash is joining a group of companies offering urban delivery in 15 minutes or less that includes GoPuff, Buyk, Jokr and Getir, some of which also directly employ their couriers. Instacart, the grocery-delivery app, also is considering a foray into faster deliveries, according to a recent report by the Information. Instacart said it had no comment on the report.
DoorDash will use micro-fulfillment centers it calls DashMarts as hubs for the faster deliveries. The company first opened DashMarts last year and now has 25 of them across the country, including the Chelsea DashMart. They carry more than 2,000 items, the company said, including fresh and frozen groceries, local products, snacks, and more.
For DashPass customers who pay $9.99 a month, the ultra-fast offering will have no additional cost for orders of at least $12. For non-subscribers, Payne said fees will be as low as $1.49 per delivery, highlighting affordability as one of the main reasons DoorDash is confident it can stand out in a field that’s growing more crowded every day.
In-depth: The pandemic has more than doubled food-delivery apps’ business. Now what?
A new DoorDash business called DashCorps employs the couriers directly and is in the process of hiring more couriers — some of them former Dashers, according to the company — for future ultra-fast delivery locations that will be announced in the coming weeks and months, the company said.
A mix of 60 part-time and full-time employees per location will have a set schedule and be eligible for some benefits, and those who work at least 30 hours a week will be eligible for health benefits, a company spokeswoman said.
In addition, DoorDash couriers will be provided with Zoomo e-bikes, unlike Dashers, who use their own transportation. Eventually, Payne said the company intends to have those couriers — who will be using a new, specific app — deliver goods from other merchant partners, such as bodegas and other grocery stores.
DoorDash stock has risen about 11% year to date, while the S&P 500 Index
SPX,
is about 21% higher so far this year.
