In recent weeks, Door Dash has upgraded their app with the ability to Dash on the way back to your starting point or zone, chat with customers through the app, and get your pay sooner with a debit card. At the same time, gas prices soared an average of $0.75 in the wake of the Russian – Ukrainian war. While many Californian’s have reported $7 per gallon, the east coast is seeing prices around $4.45 per gallon. Even Costco and Sam’s Club have reached $4 per gallon. Experts believe this will push the electrification of vehicles, but Elon Musk and other have had differing views. Check out “Is Electrification Really The Future?“
The Changing Gig Economy Landscape
My father is a full time Uber and Lyft driver. Uber and Lyft reduced their pay and bonuses by nearly 25% since January 1st, 2022. Concurrently, fuel prices rose around 30% in the same time frame. As a part-time Door Dash and Grubhub driver, I have not noticed a change in income but I have noticed a big difference in expenses. In addition to the gas prices, car insurance rates have skyrocketed because the replacement value of used and new vehicles have both skyrocketed. Many toll roads have increased their prices by as much as 50%. The cost of car parts and maintenance have risen as have car rental rates. Speaking of income and expenses, you can track both and calculate your estimated quarterly federal taxes with my Dasher Tracker Spreadsheet, recently updated for 2022.
The Minimum Order Acceptance
It seems that many Dashers, myself included, had a minimum of $1 per mile in order to accept a delivery. The $1 minimum does not cut it anymore. With the current gas prices and the cost of depreciation, maintenance, and car insurance my 2016 Honda Accord Sport costs about $0.63 per mile to run. This is very cheap compared to those with unreliable car brands or larger vehicles with larger engines and premium fuel requirements. If I accept a $1 per mile delivery offer of $12 and 12 total miles, it may take me about 30 minutes to complete the dash. The drive will cost me $7.56 and I will make a total profit of $4.44 in 30 minutes, which translates to $8.88 per hour. That is lower than minimum wage in many states.
YOU NEED TO MAINTAIN $36 PER HOUR TO PROFIT $20 PER HOUR
To get over $20 per hour, I will need to only accept deliveries that pay $1.50 per mile. Using the same example above, I will need $18 for the 12 mile dash to make $20 per hour. That translates to $36 per hour in Door Dash Income to make a profit of $20 per hour. If you have a car that requires premium fuel or a car that gets worse fuel economy than my 29 MPG Honda Accord, you will need to aim for a higher dollar per mile. These orders are hard to come by unless you schedule yourself ahead of time for weekend dashes in busy areas where you can get +$3.00 or +$4.00 bonuses. When you are picking and choosing deliveries that pay at least $1.50 per mile, you may not find any deliveries that fit your target income. Sitting in your car and idling your engine is a waste of your time and money. If deliveries are slow, take what you can get.
California’s $7 Per Gallon
There have been many photo’s of California’s gas station prices floating around social media. I have seen at least two gas stations reach $7 per gallon for 87 octane regular unleaded fuel. It’s not just fuel. Everything is more expensive in California. Effective January 1st, 2022, minimum wage in California is $14 per hour, or $15 per hour if your employer has more than 25 employees. What kind of Door Dash deliveries do you need to accept in order to reach minimum wage in California? Using the same 12 mile, 30 minute, 2016 Honda Accord depreciation delivery example I mentioned earlier along with the increased California cost to drive of $0.78 per mile, that dash offer would have needed to be $17. In other words, you need to make $34 per hour in Door Dash to make a profit of minimum wage. To make $20 per hour, that Dash would have needed to be $20. That means you need roughly $40 per hour in Dashes to make a profit of $20 per hour.
My Take
Personally, I have better ways to utilize my time than wait for a $1.50 per mile order to come up. Until fuel prices go down or Door Dash pays more, I will only drive for Door Dash when I am able to schedule a +$4.00 Sunday. Even with the +$4.00 bonus, I will probably profit $10-15 per hour on average. The days of making $20 per hour after cost with Door Dash are gone. I am still making side hustle income from mining Bitcoin and blogging through FinanceThrottle.com. While others drive for Uber and Door Dash full time, I do it part time as a side hustle. When you want to make more money, your first step should always include BUDGETING. I have a few different budgeting spreadsheets available in My Shop including the free Envelope Budgeting Tool. Your budget should include investing at least 15% of your income, paying off debt, and establishing a 6-month emergency savings account. You may need a side hustle like Door Dash to help you accomplish this.
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