On the Clock is Motherboard’s reporting on the organized labor movement, gig work, automation, and the future of work.
Last week, DoorDash quietly unveiled a sweepstakes that would give some of its underpaid and misclassified drivers a chance to make ends meet. For every 25 deliveries a courier made through DoorDash between April 5 and April 18, drivers will be entered once for a chance to win $50,000. The lottery prize will only be given to 10 drivers, and each will also be allowed to select a charity to donate an additional $50,000 from DoorDash.
“Over the past year, Dashers have played an important role in our neighborhoods, connecting customers and community members to essential items, groceries, and meals, and enabling restaurants to adapt their services to meet the demands of a COVID-19 world,” the company said in a press release. “To celebrate all that delivery drivers have done for our communities, DoorDash is excited to continue our commitment to giving back to Dashers and the causes they care about.”
Working Washington, a workers rights group in Washington state, described the sweepstakes on Twitter as “Hunger Games as a business model” and it’s not hard to see why. The sweepstakes pushes drivers to accept more trips, which may or may not actually be worth their time or expenses incurred to accept―unless the delivery driver wins the DoorDash lottery, that is.
DoorDash has offered giveaways and incentives to drivers in the past, and this sweepstake is in line with recent moves by Uber to lure drivers with a $250 million stimulus fund and outreach. And like Uber, DoorDash is trying to keep workers misclassified as independent contractors. In 2020 the company joined a coalition of app-based gig companies in California to successfully write and pass Proposition 22, a ballot measure that exempted the companies from following a host of state labor laws including classifying drivers as employees. That legislation now presents a roadblock to things like giving app workers who pick and deliver groceries a pay boost along with employed grocery workers.
DoorDash did not respond to Motherboard’s request for comment.
DoorDash, like every other company in the so-called gig economy, relies on loopholes in antitrust and labor law to misclassify workers as independent contractors, escape pesky legal obligations as an employer, and reduce operating costs in a desperate bid for profitability. And during the COVID-19 pandemic, delivery apps have flourished while their workers continue to struggle. In New York―where a significant chunk of the gig workforce consists of undocumented immigrants―workers aren’t entitled to receive a minimum wage, overtime, health insurance, nor are they eligible for unemployment and federal coronavirus assistance.
DoorDash in particular has come under fire for outright stealing its workers tips, promising to change its tipping policies so that was no longer the case, then still continuing to steal tips. The issue of driver pay is so serious that drivers use complicated techniques to strategically decline orders and boost their wages. And while DoorDash seems to have finally stopped stealing tips after months and months of criticism from workers, activists, and commentators, it still regards its shifting pay model as a serious risk to investors.
While DoorDash may pay delivery drivers subminimum wages, consistently creates unsafe working conditions, and coercively extract rents from local restaurants, while admitting it may still never be profitable, this all works perfectly for one particular community: its investors. The company took the unique opportunity offered by COVID-19 to raise billions it couldn’t otherwise convince public markets to hand over by insisting its pandemic growth is not anomalous but the new norm.
DoorDash was previously privately valued at $15 billion, it sought an IPO valuation of $31.6 billion, and that ballooned to $35.3 billion, then $39 billion, and then passed a valuation of $60 billion on IPO day as shares surged 80 percent. SoftBank’s Vision Fund paid a $680 million investment for 24.9 percent of the company, translating to a $6.4 billion just before IPO day, then $10 billion after the delivery company’s shares skyrocketed. Sequoia Capital was another big winner, investing a total of $125 million that was also worth nearly $10 billion after the stock surge.
But what about the drivers? Well, 10 of them will get $50,000 after working who knows how many hours for DoorDash while the vast majority will get paid subminimum wages. Everybody wins?