Trying To Calculate DoorDash “Hourly Pay” May Mislead You

When considering a new job or gig, the first question that comes to mind is usually: how much am I going to get paid?

With traditional jobs, the answer is usually pretty simple: you’ll earn a set salary or wage.

But DoorDash isn’t a traditional job. In fact, it’s not a job at all — it’s self-employment. That’s why if you’ve ever tried to research how much Dashers make per hour, you probably found wildly different answers. 

When you become a Dasher, you’re essentially opening your own food delivery business, so instead of thinking in terms of wages and salaries, you need to think in terms of revenue, profit, and expenses. Obviously, that’s a lot more complicated than a salary. The income you generate from a business venture can vary from month to month, week to week, and even hour to hour. 

So, if you’re looking for an answer about how much DoorDash hourly pay is, the only real answer is: it depends. You will find people on the internet insisting you can only make $5/hr, and others insisting they are taking home $50/hr. The only way to understand hourly DoorDash pay in your area using your abilities as a Dasher is to try it, track it, and run the calculations.

How DoorDash pay works

Please note: this information is aligned with DoorDash’s documentation on the subject as of January 5, 2024. Although we don’t expect it to change often, you should consult the official documentation for the most up to date information on this subject.

DoorDash pays you based on the following formula:

Base pay + Tips + Bonuses = Total Earnings

Base pay is the amount that DoorDash pays you for completing an order. According to DoorDash, this typically ranges from $2-$10. 

You also get to keep 100% of your tips for orders placed through the DoorDash app. Orders placed through a specific restaurant’s app are sometimes handled differently. Tips are often 15-20% of the customer’s order total (the cost of the food they ordered, not the base pay).

Bonuses include any promotions you took advantage of, such as challenges or referrals. 

Generally, Dashers choose to Earn Per Offer, which means that you get paid for completing an order. In that case, when you get an offer, you’ll see the expected pay for it, which includes the base pay, customer tip, and any active bonuses, such as Peak Pay. You can then accept or decline the offer. Sometimes, you’ll get paid more than the expected amount, but you’ll never be paid less (except in extreme circumstances: say, the customer retroactively contacts DoorDash to adjust their tip for you because of some major issue).

There’s also an alternative payment structure called Earn By Time. On the surface, Earn By Time seems a lot like a traditional wage — after all, it does pay you based on the time you spend working. But the reality is a bit more complicated than that. 

How does Earn By Time work?

When you choose Earn By Time, you will be paid an hourly rate for your active time (this will take the place of your base pay). Active time specifically refers to the time between accepting an order and completing it — it doesn’t include the time you’ll spend sitting around waiting for an order to come through. So even though you’ll be paid an hourly rate with Earn By Time, it doesn’t work like a wage would. 

Let’s make this clearer with an example. Let’s pretend your Earn By Time rate is hypothetically $15/hour. You get into your car ready to start dashing at 1:00pm. At 1:05pm, your first order comes in, you accept it, and you complete it at 1:20pm. Then, another one comes in at 1:30pm, and it takes you 27 minutes to complete, finishing at 1:57pm. That’s your last order for the hour.

In this example, you did two deliveries in an hour. The first order took 25% of an hour from acceptance to completion and the second took 45% of an hour. You can calculate your hourly earnings like so:

0.25*$15/hour + 0.45*$15/hour = $10.50/hour

Even though your Earn By Time rate is $15/hour, your actual hourly rate was only $10.50 because you didn’t get paid for the time you spent waiting for orders to come through. Every hour will be different (some hours you could have more short orders come through, others could have fewer long ones), so your actual hourly rate will constantly be in flux. 

Plus, you still have to add in tips, so that throws another wrench into the equation. 

What factors will affect my earnings?

We’ve already seen that hourly earnings can be pretty unpredictable. But what factors affect it? 

Revenue Factors

These are the factors that determine how much you make before your expenses:

• Your skill and experience: Dashing successfully takes skill and know-how. To maximize your earnings, you need to complete orders quickly and deal with customers. The faster you make your deliveries, the more orders you can complete per hour, and with good customer service skills, you can boost your earnings through tips. You’ll also need to develop a strategy for deciding which orders to take and which to pass on. As you spend more time dashing, you’ll learn which restaurants have long lines, when traffic is the worst, which orders to pass on, and a number of other things that can affect your earnings.
• Local market conditions: If you’re in a larger city, chances are there will be more people ordering DoorDash at any given time, so you may have more offers coming through. On the other hand, larger cities might also have more Dashers, which means there’s more competition. Tips are often paid as a percentage of the customer’s order total (the price of the food, not the base pay), and food prices will vary from city to city. Base pay also varies regionally.
• Chance: Although you can increase your odds of getting a good tip by providing great customer service, you can’t control the price of your customer’s order, and tips are often 15-20% of that price. Sometimes, customers simply won’t tip for no good reason. 

Expense Factors

These are costs you’ll incur that you’ll subtract from your earnings. Keep in mind that many of these can be used as write-offs to lower your tax burden.

• Gas: If you dash in a car, you’ll have to pay for gas to fuel your dashing (you can mitigate this somewhat with DoorDash’s Gas Rewards program). The amount you pay for gas can be the difference between profit and loss. 
• Wear and tear and repairs: The more you drive your car, the more it depreciates in value, the more maintenance you’ll need, and the more likely it is that you’ll need a repair. 
• Risk: This isn’t a concrete expense, but you need to account for the risk that you’ll get into an accident or another dangerous situation. Having a business emergency fund is a good way to stay prepared for the unexpected.
• Car insurance: If you use a car to dash, you’ll need to have your car insured. Car insurance premiums for delivery drivers are typically higher.
• Health insurance: Traditional jobs typically offer health insurance as part of the benefits package. As a Dasher, you’ll have to pay for your own. 
• Taxes: As a Dasher, you’ll need to pay self-employment taxes, which are usually higher and take some getting used to. On the bright side, you’ll be able to write off most of your expenses. 

How to calculate DoorDash hourly pay

Due to the nature of dashing, there’s no way to calculate what your pay will be in advance. 

However, once you start dashing, you can take your weekly earnings and divide that by the number of hours you worked to find your average hourly pay rate for that week. As you continue dashing, you can average those hourly rates to get a more accurate idea of how much you’re earning per hour over the long term.

Remember, your income can fluctuate from week to week, so you can’t go by just one week — that week could be a particularly busy or slow time of year.

As a completely hypothetical example, let’s say you made $400 one week, and you worked 20 hours. Simply do: 

$400/20 hours = $20/hour

For that week, your average gross hourly rate was $20/hour. But keep in mind that this is only an average — you made more than $20 some hours and less others. 

Now, imagine that you make $300 working 20 hours the next week, which comes out to $15/hour. You can average those two rates to get a more accurate idea of your gross hourly earnings over both weeks:

($20/hour + $15/hour)/2 = $17.5/hour

As you keep getting new data points each week, you can continually refine this number to get a better picture of how much your hourly compensation is. But to make this number useful, you need to take your expenses into account.

Scott Jones, who has been dashing since 2018, says “I take my gas right off the top, so as to be honest with myself about whether or not the gig is even worth my time. Many times, I have talked myself out of a gig when I added in the loss of profit from a full tank of gas it would cost to complete.”

Luckily, expenses can be a bit easier to estimate — most of your expenses will come from your car, and the IRS releases an estimate of the cost per mile of owning a vehicle, which includes gas, depreciation, insurance, repairs, and maintenance. The Stride app can track your mileage automatically so that you’re ready when tax season comes around.

The 2024 IRS mileage rate is $0.67 for business purposes. Let’s use that to see how expenses can affect your hourly rate. 

Imagine that in the first week from our example above, you drove 200 miles over those 20 hours. We can estimate your expenses for the week like so:

$0.67/mile*200 miles = $134

Now, divide that number by the hours you worked to get your estimated expenses per hour:

$134/20 hours = $6.70/hour

Subtract that from your average hourly rate from earlier to get an estimate of your average net hourly rate:

$17.5/hour - $6.70/hour = $10.80/hour

There’s one last step: at the end of the tax year, you can add up all your expenses and deduct them from your taxable income. So, if you made $50,000 and paid $10,000 in expenses, you would only have to pay tax on $40,000. 

Calculating how tax deductions would affect your earnings is much too complex to go into here. Many Dashers actually report that they are able to take so many deductions that they end up paying very low or no taxes.

Keep in mind that this specific estimate is based on entirely fabricated numbers and not representative of how much you can expect to earn as a Dasher. 

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