Source: The College Investor
DoorDash is a food delivery service that can also be a great side hustle for college students.
In the past, full time employees and students would take side jobs delivering pizza to earn a few extra bucks. And it could be a great way to make some extra income!
Today, you can deliver for almost any food chain by becoming a “Dasher” or a driver for DoorDash. Is becoming a Dasher the right side hustle for you?
If you're not in a the know, DoorDash is an app that allows you to order food from a huge variety of restaurants. It's a competitor to Uber Eats.
We’ll explain the basics, explain average earnings, and how you can hack the system to earn more. You can also read how it compares to the Best Side Hustles here.
If you just want to get started, sign up with DoorDash here >>
Quick Summary
- DoorDash is a food delivery service where you can earn on your own terms
- You get paid 100% of the boosts and tips
- They are growing fast and can be a great source of side income
How Does DoorDash Work?
DoorDash is a food order delivery service. Customers place an order at one of dozens of restaurants, and then they agree to a delivery fee and tip. The app then pushes orders to “Dashers” who are logged into the app.
Once you accept an order, you drive to the restaurant, place the order, bring the order back to your car and deliver it to the customer.
All the directions for the delivery are inside of the DoorDash app.
Pay: Delivery Fee + Tips
As a Dasher, you get to keep 100% of any boosts and the customer’s tips. DoorDash makes money by charging restaurants a percentage fee of every order.
As a Dasher, you not only need to keep an eye on your bottom line, you need to be sure that you’re creating value for everyone involved. That means, you need to keep an eye on your customer rating. Every customer rates you on a scale of one to five stars; better and faster customer service usually yields a higher rating.
You also need to keep close to a 100% completion rating. That means if you accept a job, you need to complete it. Failing to complete a delivery could mean you’ll lose your job as a Dasher.
Finally, you’ll need to keep an eye on your acceptance rating. The acceptance rating is the percentage of jobs you take relative to the number of jobs offered to you. While you need to be strategic about maxing your earning potential, you’ll may need to take subpar jobs from time to time just to keep them happy.
Bonuses: You'll often see bonus offers in the app if you meet certain criteria. These can even be just for driving at certain times. They also have peak pay for driving and delivering during peak times, like dinner.
What Costs Do You Cover?
As a Dasher, you have to pay for all your business expenses. That includes data for your phone, gas, car insurance, wear and tear on your vehicle, and both sides of self employment tax.
If you decide to become a Dasher (or a driver of any kind) be sure to install an app like Everlance to keep track of all your expenses.
And when it comes to tax time, you need to make sure that you accurately report both your income and your expenses. If you don't keep track of your expenses (and don't report them), you could be overpaying in taxes. You only pay taxes on your net earnings after expenses. So, you will receive a 1099-NEC, but then you need to self report your expenses like mileage on a Schedule C.
Check out our guide to the best tax software to find the best options for side hustlers.
How Much Can You Expect To Earn?
Since DoorDash only operates in large metro areas, most Dashers don’t need to put tons of miles on their car to earn a decent income. Rates really depend on how many miles you have to drive, the size of your orders, and how quickly you can complete orders.
The great thing is it's rapidly growing. They are both adding more cities, and adding more restaurants all the time. This means that there will be more users, which means more potential to earn.
Promotions
DoorDash is always looking for new drivers, especially in certain cities, and especially with the pandemic increasing demand. As such, sometimes you can get huge promotion or bonus offers when you sign up.
Referral Bonus
Once you sign up to be a driver, you'll be able to get paid for referring other drivers. Inside the app, you'll get a referral code that you can pass on to others.
The amount you'll get also varies by city. One your referred driver makes the minimum number of deliveries to qualify, you'll get a bonus!
Sign up here to become a Dasher >>
New Consumer Bonus
If you're looking to be a new customer, they run special promotions all the time!
Right now, they are offering new customers $0 delivery fee on their first order. That can be a pretty good savings depending on how much you order!
How You Can Earn WAY More Than Average
While most people earn just a little extra cash driving, some drivers report earning more. Here’s how they report to do it.
There's also a great sub-Reddit where you can learn from and find tips and tricks from other drivers: https://www.reddit.com/r/doordash/
You can also learn some things to avoid as well!
How DoorDash Compares To Its Competitors
DoorDash is not the only food delivery service out there, but it has been rapidly growing and it sets itself apart in several ways. As a consumer, the biggest way it sets itself apart is the quantity and quality of restaurants on its app.
If you want to become a Dasher, here's how it compares:
DoorDash vs. Uber Eats: Uber Eats has one of the more complicated formulas for how it pays its drivers. Drivers are paid for each delivery based on an equation that contains a pickup fee, a drop-off fee, and a mileage fee that covers the distance from picking up the food to dropping it off at the customer. Drivers receive 100% of any tips customers leave in the app. DoorDash has a much clearer approach to pricing, but mileage will vary on which is better.
DoorDash vs. Instacart: Instacart allows you both to shop for groceries and deliver them. What's great about Instacart is that you can see the location, order size, and delivery all in the app before you decide to take an order. This gives you solid transparency before you begin. Read our full Instacart driver review here.
Should You Become a Dasher?
Driving for DoorDash is a decent way to earn some cash on the side. It’s nice that you can use some business savvy to boost your bottom line (unlike some of the other gig economy apps).
If you’re looking for a part time job that you can do on your own schedule, this fits the bill. I would still prioritize work on your main career above a side job, but it’s one of the better ways to drive and earn.
DoorDash Review
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Flexibility
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Ease Of Use
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Income Potential
Overall
Summary
DoorDash is a great way to earn a side income for delivering items! You can get paid to deliver food and other items, plus bonuses and more!
Pros
- A flexible way to earn extra money on your own schedule
- Rapidly growing demand for drivers
- No commitments required, just do it on your own time
Cons
- You may not net (after expenses) as much as advertised, it does vary greatly
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications, including the New York Times, Wall Street Journal, Washington Post, ABC, NBC, Today, and more. He is also a regular contributor to Forbes.
Editor: Clint Proctor Reviewed by: Colin Graves