Considering driving for Doordash, but unsure if they’ll make it worth your while? The relationship between Doordash and its drivers can be a little unclear for someone new to the gig economy. For example, how exactly do they pay you? Do they help to offset your expenses such as gas and vehicle maintenance?
Below, we’ll cover everything you need to know about fuel costs and reimbursement as a new Doordash driver.
Does Doordash Pay for Gas?
No, Doordash does not pay for gas. Due to the nature of the working relationship between Doordash and its drivers (Dashers), the food delivery service has no obligation to reimburse gas or mileage directly.
You essentially operate as a business when you drive for Doordash or many similar services. Doordash acts as a client who pays you for each delivery you complete. Gas, vehicle maintenance, and other expenses are the costs of operating your business, and Doordash will not directly reimburse you for these expenses.
Your Employment with Doordash
When you work for Doordash, you are not technically their employee. Instead, each Dasher is self-employed, working as an independent contractor. In the US, you may hear people refer to this as 1099 employment, owing to the code of the tax form this type of worker typically receives.
Essentially, rather than hiring you as a part-time or full-time employee, Doordash and similar services allow you to form a micro-business. They then act as a client, paying your business on a per-service basis.
This type of employment offers some benefits to both sides. For you, the driver, it enables the freedom and flexibility that makes gig work appealing to so many.
As an independent contractor, you are your own boss and can generally define your schedule, hours, and which jobs you choose to accept.
On the other hand, the independent contractor relationship benefits Doordash in that they have no obligation to offer their drivers many of the benefits that would be required for traditional W2 employees. That is why gig workers typically don’t receive things like insurance benefits, paid time off, or, you guessed it, reimbursements for things like gas and vehicle maintenance.
This type of working relationship has been a matter of some political debate recently, and some have argued that it unfairly benefits gig service companies at gig workers’ expense.
How Does Doordash Pay Work?
Doordash currently calculates its pay for US and Canadian Dashers using three broad factors:
Base Pay comes from various factors determined by the service, including the time and distance of the order.
Promotions, including peak pay, challenges, and guaranteed earnings, act as modifiers that can potentially increase the base pay.
Tips can be paid by customers entirely at their discretion. Doordash forwards 100% of tip amounts to its Dashers and does not alter base pay or promotional rates based on tips.
While several factors go into the calculation of the per-order pay, the overall compensation for Dashers is relatively straightforward: They pay drivers the amount they earn on their orders, and that’s about it. From there, it’s the driver’s job to subtract gas and vehicle maintenance expenses to determine their bottom line profit.
Do UberEats, GrubHub, and Instacart Pay for Gas?
Like Doordash, its alternatives such as UberEats, GrubHub, Postmates, and Instacart also do not pay for gas.
The independent contractor relationship is arguably the backbone of the gig economy as it stands today. That means that most gig service providers will employ their gig workers this way, and you are not likely to find traditional employment benefits such as gas reimbursement with any of them.
This situation may one day change, but for the time being, it is the status quo of the gig economy. So, for now, let’s look at some of the options drivers have to reduce the impact of rising gas prices on their business.
How to Save Money on Gas Driving for Doordash
Doordash won’t pay for your gas, but there’s still plenty you can do to improve your gas bill and reduce its burden on your profit margins. Here are a few top money-saving tips for food and grocery delivery.
Doordash Gas Rewards Program
Even though they won’t reimburse you directly, Doordash is doing at least one thing to help with soaring fuel prices. In the spring of 2022, they launched the Doordash Gas Rewards Program to curtail the harmful impact of unprecedented prices at the pump.
Within the program, all US Dashers are eligible to earn 10% cash back on gas purchases using a prepaid business debit card. This benefit can be used at any US gas station, even while Dashers are not currently delivering food. Additional advantages and incentives exist for drivers who complete specific benchmarks for the number and distance of deliveries they complete.
Doordash launched this program as a temporary relief effort for its Dashers. It is still active at the time of this writing, but that may not last long!
Track Everything for Your Taxes
One essential difference between being an independent contractor and an employee in the US is the role of taxes.
When you are a W2 employee, your company will withhold money from your paycheck to pay income taxes for you, and you don’t have to think about it much until tax season. On the other hand, independent contractors are responsible for tracking and paying their own tax responsibilities.
While this added responsibility can be daunting at first, it also gives you some advantages, such as deducting business expenses from your taxes.
You still have to pay for your gas, but since that money is one of the costs of conducting your business, you can deduct it from your taxable income. So while driving for Doordash, keep track of your mileage, gas costs, and receipts to help reduce your tax bill later!
Drive More Efficiently
As the saying goes, you can never save more money on something than by not buying it at all. This adage is as true with gasoline as anything else. If you have an option to deliver for Doordash by non-gas-powered means such as a bicycle or electric vehicle, by all means, take it!
Of course, many of us don’t live in the most bike-friendly areas or happen to have a spare Tesla sitting around to help us deliver orders from Wendy’s. If that describes you, there are still plenty of ways you can reduce your overall gas usage through more efficient driving and fuel consumption.
Learning a little about fuel efficiency and how your particular vehicle works can go a long way in reducing the amount of gas you consume on your regular deliveries. You can also take a foray into the art and science of hypermiling to see how some people pull off extreme gas savings through driving efficiency.
Plan Your Fill-ups
Driving for rideshare or delivery services takes you to various towns and neighborhoods. Unfortunately, this can make gas unexpectedly expensive since prices may vary significantly over a distance of just a few miles.
This cost adds up. A price difference of $0.50 per gallon in a 20-gallon tank would save you $10 on every fill-up. Paying attention to your gas station options in various neighborhoods and their costs can be a huge advantage.
As you drive around on your regular deliveries, try to get a feel for where you can usually find the best gas prices and where to avoid filling up. With time, you can start to plan this knowledge into your routes and schedule, taking advantage of your most cost-saving options.
Sign up for a Loyalty Program or Cash Back Card
If the Doordash Gas Rewards Program we mentioned above is not an option for you, there is still the reliable option of a regular cash-back credit card that offers points on gas purchases.
Many credit cards are available that enable you to earn cash back rewards on gas and other travel expenses such as tolls and parking. Adding one of these to your wallet and using it to cover your delivery-related expenses can help take the edge off your driving costs.
Additionally, whether you use Doordash’s program or a rewards credit card, consider also signing up for a loyalty program with a gas station chain in your area. These can offer generous discounts and stack up to hefty savings when combined with the tip above on planning your fill-ups.
Filling Your Tank Without Draining Your Profit
At first, it can be somewhat discouraging to learn that Doordash, UberEats, and other delivery service apps will not directly help their drivers by paying their fuel costs. However, once you look into the details of the arrangement, it doesn’t look quite so grim.
The responsibility of covering your fuel costs as a Dasher comes with several other things about being an independent business operator that give you the freedom and flexibility to build your work around your life and preferences. On top of that, there are many steps you can take as a delivery driver to reduce your overall gas cost burden and widen your profit margin.