What does this mean for its independent drivers?

Doordash launches new NYC DashMart and employs couriers. What does this mean for its independent drivers?

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The opening of a DashMart in New York City, brings a grocery warehouse and delivery service, operated as a subsidiary of DoorDash, to Manhattan. The idea of getting groceries delivered within 15 minutes sounds great for customers, as does the idea of not having to schlep the goods through mucky or slushy streets. There are things drivers might like about this new service, too.

Press releases announcing the DashMart NYC pilot program touted the fact the new service would classify drivers as employees rather than independent contractors. With the continuing controversy over this issue, in New York City as well as California and other states, this seems to be, on the surface, a wondrous thing. 

The DashMart launch might turn out to be particularly enticing if the DoorDash 15 minute delivery model rolls out across additional cities, making more DoorDash drivers eligible to work as Das employees for DashMart. We suspect there’s a lot more than meets the eye here, however.

Any time a new opportunity is announced with this much excitement, it’s worth it to dig into the details to see what the benefits for drivers might really be. That’s why, in this blog post, we’ll look at:

  • What DoorDash and DashMart are doing in NYC
  • Why DashMart is hiring deliverers as employees
  • What DashMart deliverers can expect
  • The pressure of fast delivery can raise safety concerns
  • The pros and cons of working for DashCorps

What DoorDash is doing in NYC

Before we get into the nitty gritty details of Doordash’s new offering, it’s worth noting that DashMart isn’t a brand new concept. DashMarts are grocery warehouses of sorts, stocked with essentials DoorMart drivers and regular Dashers can quickly deliver to customers. 

 DoorDash has already opened at least 25 such locations in major cities across the country. The thing that’s making such a huge splash in the Big Apple is the promise of delivery within 15 minutes.

Now, in a densely populated area such as New York City, it’s not impossible to deliver to a customer within a two mile radius in 15 minutes or less. In a place that’s more spread out (think just about anywhere), it might not be so easy. Even with the density factor, though, that 15 minute promise is a high bar to meet – especially with NYC traffic. 

Still, DoorDash is determined to provide this service better than anyone else. As you might imagine, small business owners might not be impressed with having to compete with DoorDash for local business. In an attempt to quiet the opposition, the company ultimately plans to expand its speedy delivery services beyond its own warehouses to include other establishments, such as bodegas and even full-size grocery stores.  

Much of the reason DoorDash has made this promise is the need to compete with other super-fast delivery services, including GoPuff, Gorilla, and Jokr. These and other rivals are already working with that 15 minute delivery window. What’s more, they also are hiring people as employees to make those swift deliveries.

Why DashMart is hiring deliverers as employees

Competition is one reason DoorDash is highlighting the fact that some of the people who will work for the NYC DashMart will be classified and treated as employees. This is, of course, a point in their favor in the eyes of those who advocate for better treatment of gig drivers and couriers. Before believing that’s the only reason, though, let’s look at some of the additional pressures involved. They include:

  • Mandates from New York and other cities to pay delivery people minimum wage or more

In September 2021, the New York City Council passed measures to protect delivery people, which include minimum payment per trip, the option to refuse deliveries without penalty, plus a requirement for the delivery companies to provide insulated food bags for workers and for restaurants to allow drivers to use their bathrooms.

  • Pressure from states and other jurisdictions to provide employee benefits to workers

The controversy over Prop 22 in California continues to rage, as you can see in this Gridwise blog post. The Golden State isn’t the only one embroiled in efforts to push gig driving companies to classify their workers as employees, and after state governments got stuck with the bill for driver unemployment compensation during the pandemic, they’re eyeing ways to make big changes. DoorDash, meanwhile, maintains that 90 per cent of its drivers would prefer to retain the flexibility of being independent contractors. 

  • The ability to expand business, work with larger stores, and have a predictable work force

AM New York quotes Christopher Payne, the president of DoorDash, as saying the following in a press release: “Consumers increasingly expect an effortless, enjoyable experience, so while we are starting with DashMarts, our goal is to expand this offering to select grocery and convenience partners.” Already, in New York City, DoorDash has signed on some 400 bodegas to their app platform, and started a community outreach to work with small businesses.

What DashMart deliverers can expect

Before you pack up and move to New York City just so you can be classified as a Doordash employee, hang on. There are some caveats you need to be aware of. 

First, not all delivery people will be classified as employees. According to The New York Post, DoorDash said that full-time employee status and the benefits that come with that will be given only to “a significant number” of workers. Many drivers for the service will be independent contractors.

If and when DashMart and DashCorps rolls out to towns all around the country, this will still be the case. Not all DashMart drivers or couriers will be hired as part of DashCorps.

At the pilot DashMart location, in the trendy Chelsea neighborhood of Manhattan, there are 60 people employed as couriers, and they work about 25 hours a week. They get $15 per hour, plus tips, and are classified as W-2 employees. They have uniforms and report to managers, who supervise their activities. Others are offered full-time employment and benefits, but not all.

DoorDash has formed a new company, called DashCorps, which will employ certain workers who make deliveries for DashMart. The employee couriers will work a set schedule, between 25 and 40 hours per week, and those who work more than 30 hours will be offered medical, dental, and vision insurance.

Some will also benefit from Employee Assistance Programs, Flexible Spending Accounts, and commuter benefits. Most employees are expected to work an average of 20 hours per week. 

All DashMart employee couriers will no longer be able to deliver as regular Dashers. However, they can still work for other apps as independent contractors.

The DashCorps couriers use E-bikes, which are not standard bicycles, but also not mopeds. They’re fairly controversial in the city, according to this article from The New York Daily News. Responsibility for any violations associated with them, if the e-bikes are distributed to delivery people by DoorDash, would hopefully rest with the company. Independent drivers still have to stay on top of local regulations and comply with them to avoid getting cited.

Getting busted by the NYPD for riding an unauthorized e-bike is not the only thing drivers have to worry about. Their personal safety, for many reasons, is also at stake.

The pressure of fast delivery can raise safety concerns

The company hopes that DoorDash customers will favor their DashMart delivery service because they are already familiar with the app. Customers will see DashMart as an option under a “convenience” tab on the app or the DoorDash website. 

The pressure of the “15 minute” delivery window is reflected in the words of DoorDash president Christopher Payne, who spoke of “10 to 15 minute” delivery windows in the press release announcing the opening of the new DashMart in New York City. 

Not surprisingly, that pressure will get transferred to delivery people. This can result in excessive rushing and less than prudent on-road behavior; essentially, it can become a safety hazard. Advocates for New York City’s some 65,000 “deliveristas” are concerned that this business model will push more workers to be reckless and unsafe. 

Advocates in New York and other cities are also concerned about the way companies train, or don’t train, their workers. As a result, many run traffic lights and weave through traffic in ways that don’t seem to make much sense, considering they might only be delivering some bananas or a quart of milk.

DoorDash maintains that it will be paying that minimum wage to drivers, and give them access to a new in-app safety tool called “SafeDash.” It’s really just a way to call 911 from the app. With rising crime and an increased possibility of being involved in accidents, this seems to be a bare necessity.

In addition, all DashCorps couriers will be required to participate in a two-hour training. This could help to create a greater consciousness about the balance between speed and safety among speedy delivery people.

Speaking of balance, let’s turn now to the good and not-so-good points about working for DashMart and DashCorps.

The pros and cons of working for DashCorps

Gig driver employment is a hot topic among drivers, and it also raises the collective blood pressure in gig companies and government jurisdictions. The new model offered by DoorDash with its DoorMart and DoorCorps rollout brings up the issue in a new light. It further blurs the line the companies have drawn, which have justified them classifying workers as independent contractors. This could make those ongoing disputes even trickier.

Here, we are more concerned about the welfare of drivers and delivery people. So what might working for DoorDash’s new speedy delivery service be like?

Pros:

  • Employee status: If you like the idea of being a full employee, joining DashCorps makes that possible.
  • Guaranteed minimum wage: You can predict your hourly income, and know that there will also (most likely) be tips.
  • Set hours: You will have a set schedule, and not have to worry about the best times to work.

Cons:

  • Limited hourly wage: You lose the ability to make more than minimum wage at peak times.
  • Loss of flexibility: If you decide you want a day off, or even a few hours to yourself, you’ll need to clear it with management.
  • Pressure of fast delivery: As a regular Dasher, or as a courier for another delivery service, you have less stress and less risk of accidents. 

You have to decide what’s right for you, based on the opportunities available where you live, and how you feel about the issues we’ve covered here. Whether you pass on this new business model, or if you do sign up to work as part of DashCorps, and also want to work for other delivery or rideshare services, you can keep track of everything with Gridwise! 

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