Comment by fckgw
2 hours ago
From a driver persepctive:
DD plays big games with pay, sometimes hides tips, drives down base pay, and stacks orders with good pay and bad pay offers to try and pay drivers as little money as possible.
In a bad economy, there's less people ordering on DD (although higher income earners who aren't as effective by economic effects don't change habits), however, it drives MORE desperate drivers to the platform that accept the low pay orders since they no longer have an income. This drives down all wages for drivers, and costs, which in turn pads DD's margins.
We actually see this seasonally in the summer when more students and teachers join the platform over the break. There's a glut of drivers, you can't cherry pick higher paying orders and most stuff that's left to fight for is low paying, no tip orders. When school starts back up things return to normal.
This is why DD is trying to sign up as many drivers as possible. If you remove the scarcity of drivers, then every low paying gig will eventually get picked up, driving average pay down and you can ratchet down your base pay hoping customer tips make up the slack.
So when AI-induced layoffs happen, it's good for DD because there are more potential drivers available? Or at least that nets out the downside of a bunch of well-heeled potential customers losing their jobs?
You're probably absolutely right about this, and some people in the company, or who invest in it, have likely made this exact (cold hard) calculation.
I obviously going to be a balance but gig work has an incredibly low barrier to entry in that all you need is a car, insurance and a phone. The company sets the bar as to how many people are allowed into a "zone" to work via waitlists. They control the labor pool and thus control the payouts. The more people signed up among limited orders, the more people willing to lower their pay standards just to take any order and get paid.