DoorDash is an on-demand food delivery service that lets you order food and drinks from restaurants in your area.
When you order from DoorDash, your food is delivered by a freelance worker who doesn’t belong to any single restaurant.
Since restaurants don’t have to hire delivery drivers, DoorDash makes it easier for them to expand their delivery business.
DoorDash is an on-demand food delivery service that partners with local restaurants to deliver food to homes and businesses. However, due to the way that DoorDash orders are delivered, the app makes it easier for restaurants to get into the delivery business.
How DoorDash works
DoorDash operates in hundreds of cities, offering hyperlocal food delivery across the US. The company works with restaurants, letter them set menu prices, but controlling delivery and service fees themselves.
The biggest difference between DoorDash and other apps is that orders placed through DoorDash don’t make restaurants use their own delivery drivers. Instead, DoorDash has its own fleet of freelance delivery workers – they’re called Dashers – who are paid through tips, a base salary from DoorDash, and by completing “challenges.”
This makes it easier for restaurants to start a delivery business, since they don’t have to hire their own delivery workers.
In the past, DoorDash would take some of their drivers’ tips – they claim this is no longer the case. The company’s been involved in other lawsuits regarding the alleged mistreatment of their workers.
Restaurants have to pay DoorDash to use their drivers and receive orders through the app. Depending on the specific relationship that a restaurant establishes with DoorDash, the restaurant may pay DoorDash a monthly fee, a flat fee per order, or a commission based on how much money they make.
These fees are used to pay Dashers, perform background checks on these Dashers, process credit card transactions, pay for advertising and marketing, and more.
DoorDash gives restaurants a choice about how they offer their delivery services. Storefront, for example, is a service that DoorDash offers that lets customers order from the restaurant’s website, not just the app. DoorDash Drive is built for big orders, like catering platters, and lets restaurant handpick Dashers to help them make those large deliveries. And DoorDash also allows restaurants to rely on the app exclusively for all deliveries.
For restaurant owners who want it, DoorDash also offers data analytics to help restaurants better understand their business and work more efficiently, as well as standalone tools like a net profit calculator for delivery sales. The DoorDash Merchant Portal lets restaurants track sales, adjust the menu, and track metrics like total sales, average order size, and most popular menu items.
For customers, DoorDash has obvious value: it enables fast ordering and delivery for restaurants across the local area. Using the DoorDash website or mobile app, you can search for local restaurants, browse the menu freely, and track the order as the driver picks it up and brings it to you.
Not every restaurant offers their entire menu on DoorDash, however – the restaurant gets to choose their online menu. And since they don’t manage their own delivery drivers, any issues you have with delivery will likely need to be taken up with DoorDash, not the restaurant.
Jim Messina is a political and corporate advisor and CEO of The Messina Group. He previously served as the White House Deputy Chief of Staff for Operations under President Barack Obama from 2009 to 2011 and as the campaign manager for Obama’s successful 2012 re-election campaign.
After serving as Obama-Biden campaign manager and White House Deputy Chief of Staff and now living in San Francisco and working with the tech sector, I am hopeful about the Biden-Harris administration’s ability to put in place smart policies and regulatory stability to further unleash the industry’s vast potential — not to mention the effect their calm and measured leadership could have on our greater economy.
However, with new leadership comes new perspectives on many of the most critical issues facing Silicon Valley. While the bonds between the innovation economy and the Obama-Biden Administration resulted in national prosperity, the tech sector is now intertwined in nearly every facet of American life.
The resulting tension means the new Administration will take its role as regulator seriously and investors and businesses alike should not overlook how quickly President Biden will move on policy – especially as it relates to the future of work and getting the U.S. economy back on track.
There’s no question the gig companies had a banner year in 2020. Even with ride-hailing usage down dramatically, the strength of meal, grocery and just about everything else delivered combined with the victory in California of Proposition 22 has driven up market caps and positioned many startups for going public. Yet, while the West Coast may be feeling emboldened, the Beltway has another trajectory in mind.
Congress has been working on gig worker classification legislation named the PRO Act for months. The bill closely mirrors the maligned California Assembly Bill 5 that Proposition 22 mostly reversed. It’s broadly supported by labor and could see some traction this year. Labor is already working hard to line up support from the various Congressional coalitions, and at the same time gig economy companies are gearing up to fight it with their unlimited resources.
The question is – what will President Biden do? Long ago he voiced his support for AB 5 and laid out plans to solve worker misclassification during the campaign, but he’s also hiring and appointing staff to the Administration deeply experienced in tech. President Biden has been governing longer than most startup founders have been alive, he’s a master at understanding forces in Washington and how to reach a compromise. He knows that what’s rarely discussed during legislative debate is how the law will actually be implemented.
We shouldn’t be surprised if the Biden Administration convenes the Department of Labor and the industry to determine how companies actually enact worker protections.
Despite most bills being thousands of pages, they’re rarely prescriptive. Those details are left up to agencies. President Biden has oversight of the Department of Labor, which, if the PRO Act is passed, will be responsible for its implementation.
We shouldn’t be surprised if the Biden Administration convenes the Department of Labor and the industry to determine how companies actually enact worker protections. President Biden’s nominee for Labor Secretary, Boston Mayor Marty Walsh, while a staunch supporter of labor, is also well regarded by the business sector as someone they can work with and reach a compromise.
We just have to look to the states to understand why this outcome is so plausible. The gig companies already have Proposition 22 type campaigns underway in six states and are running legislation in a half dozen more. By the end of 2021 there will be law on the books codifying worker protections in nearly a third of the country, modeled on Proposition 22.
This kind of momentum is hard to ignore and labor knows it. Although labor is aligned in its support of the PRO Act, the alignment becomes blurry when considering state action. For example, many northeastern states have had a thriving black car and taxi industry for decades.
This means Labor’s position on gig laws in New York and New Jersey are quite different than places like Washington State or Illinois where gig workers are still relatively new and the ink is drying on regulations supported by Uber and Lyft just a few years ago. Labor is aligned as much as they can be and enough to support the PRO Act, but there isn’t a national movement and that leaves room for compromise.
This is all good news for the tech sector. It’s a fantasy to think that regulation wouldn’t eventually come to protect the very workers who power the gig economy. And that’s a good thing – tech has a moral responsibility to do right by its workers. However, those regulations shouldn’t and won’t be imposed on tech. Rather it will take weeks and months of campaigns and bills winding their way through the states and Congress, culminating with negotiations and compromises.
Or maybe even years of renewed regulatory processes. All of which will be overseen by a new President who has witnessed first-hand over his career how innovation can help the nation grow and recover.
After four years of Trump’s stubborn denialism, magic thinking and economic harm, Biden will promote policy rigor, public spiritedness and private sector ingenuity to work together for innovative solutions. It will be hard work and I promise you it won’t be pretty, but we should expect the dawn of a new era of U.S. tech-driven dynamism.
Catherine Brock, The Motley Fool
Published 7:00 a.m. ET Jan. 19, 2021
Feeling unprepared for retirement? Gig work in your senior years could be the solution. At least that’s a conclusion made by a 2020 report from the Center for Retirement Research at Boston College. The study analyzes income replacement rates in retirement for different categories of workers, including those who had large income shortfalls at age 62. Among that group, those who transitioned from traditional work to gig work at 62 were able to shrink their income gap by ages 67-68. Interestingly enough, the gig workers were able to cover more of their income shortfalls versus those who stayed in their traditional jobs.
You could experience the same result, especially if your gig income allows you to delay claiming your Social Security and/or making withdrawals from your savings. Here’s a look at three ways you can manage those income streams to close up your retirement income shortfall by your late 60s:
1. Let the gig work pay the bills
Generate enough income from gig work and you may not need to touch your savings or your Social Security immediately. That’s an ideal scenario since both should grow on their own over the next five or six years.
Every $100,000 of savings you have should grow to nearly $128,000 in five years if you have it conservatively invested at 5% annual growth. And delaying your Social Security claim raises your benefit amount – first, because you avoid early retirement reductions and, later, because you earn delayed retirement credits.
2. Claim Social Security early and delay retirement distributions
If your gig work income isn’t enough to pay the bills on its own, you could claim Social Security early and put off your retirement distributions until later. Before you decide on this approach, you should know the rules on earning income while receiving Social Security benefits.
You are subject to income limitations if you start receiving Social Security before you reach full retirement age, or FRA. For anyone born after 1942, FRA is at least 66 and at most 67. The income limit can be adjusted each year, but it’s $18,960 in 2021. In the years prior to reaching FRA, your Social Security benefit is reduced by $1 for every $2 earned above that cap. In the year you reach FRA, your earnings are reduced by $1 for every $3 you earn above a different cap. That cap in 2021 is $50,520. Only the money you make before your FRA month is counted.
This strategy makes more sense if two things are true: One, you know you won’t exceed those income caps; and two, a down market has affected your retirement savings balance, and you’d prefer to wait for a recovery before taking distributions.
3. Delay Social Security and take retirement distributions
The third option is to delay your Social Security benefits and use retirement distributions to supplement your gig work income. Waiting to claim Social Security does increase your benefit. Those increases are calculated based on your claiming age relative to your FRA. If you claim before FRA, early retirement reductions can shave up to 30% off your Social Security income. And if you claim after FRA, delayed retirement credits can increase your benefit by up to 24%.
What’s nice about this strategy is that the income increase you receive is predictable and lasts the rest of your life. To estimate your benefit at different claiming ages, create an account and log in to my Social Security.
Early distributions from your retirement account may also help you with RMDs, or required minimum distributions. These are mandatory, taxable distributions you must take from your IRA or 401(k) accounts starting at age 72. They’re based on your balance at the end of the prior year, along with your life expectancy. If you consume more of your money in earlier years, that lowers your balance later. In turn, your required distributions should also be lower. That gives you the option to leave more money in your account if you don’t need it to pay your bills.
Gig work for improved financial security
Seniors are closing up their retirement income shortfalls with gig work, and you can do the same. Once you find a gig you enjoy, take the time to define your strategies for Social Security and savings withdrawals. Make the right moves and you could be enjoying a comfortable, more traditional retirement in your 70s.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
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