(Bloomberg) -- A DoorDash Inc.-funded study in Pennsylvania found that most participating couriers said they prefer to remain independent contractors after the company began offering extra payments in lieu of benefits normally reserved for salaried employees.
Under a pilot program that began in April and will run through March 2025, DoorDash has been issuing monthly payments amounting to 4% of eligible drivers’ income for each period. The payments are administered through the benefits platform Stride, which manages cash accounts for the workers. Although couriers can use the money for health care plans, they were most likely to put it toward paid time off and emergency savings, according to the DoorDash-commissioned report, which was produced by research firm NDP Analytics and released on Tuesday.
DoorDash said it has so far paid $802,722 in total to 4,400 enrolled drivers, or a little under $200 per person on average. The couriers needed to meet an earnings threshold to participate. More than 70% of surveyed drivers in the pilot program said they would prefer the government continue to classify them as independent contractors. That number increased to 86% when they were presented with the option of receiving these benefits, the study found.
Companies like DoorDash, Uber Technologies Inc. and Lyft Inc. face pressure from regulators and labor advocates to offer better pay and benefits to gig workers, who aren’t salaried employees. In recent legal settlements in the US, regulators and companies have embraced an “independent contractor-plus” model, which provides some protections, such as a minimum pay standard, while keeping gig workers off the payroll. The setup lets companies to control costs and allow the flexible schedules they say most drivers want. And it’s a way for them to minimize the risk of costly lawsuits about worker status classification.
“These findings reaffirm what we’ve heard for over a decade from Dashers: flexibility is what draws them to this kind of work,” Max Rettig, the company’s vice president of public policy, said in a statement.
DoorDash said it expects bills to be introduced in Minnesota, Pennsylvania and Wisconsin that would require gig-economy companies to contribute to portable benefits accounts like the one DoorDash has been piloting.
“We hope this report provides insights that can help policymakers pave a path to strengthening independent work by providing what matters most to Dashers,” Rettig said.
Other companies have also been experimenting with this approach. On Monday, Lyft announced it’s launching a similar program with Stride for drivers in Utah. But awareness of the new benefits model is still limited. Out of more than 250,000 active couriers in Pennsylvania in 2023, 19,113 individuals met the program eligibility requirements, which included a minimum of 100 deliveries and $1,000 in pre-tip earnings from April to June 2024, DoorDash’s report found. Among those workers, about 23% opted to enroll in the program.
DoorDash drivers who enrolled in the pilot tend to be older, make more deliveries and have been on the platform longer than eligible couriers who did not participate, the report found. About one in five of survey respondents said they have spent more time delivering orders since joining the program, while 74% said there was no change.
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