Can You Make A Living Off Of DoorDash? Let’s Do The Math.

When we talk about "making a living," we mean earning enough to consistently cover your essentials – like housing, food, healthcare, and transportation – without facing financial distress.

You’ve probably seen a couple of Dasher reviews that claim to have exceeded that threshold by a huge margin. Take this Dasher on YouTube, for instance. By working full-time, he claims to earn $2,000 within seven days. 

On the flip side, there are also tales of Dashers who seem to be barely scraping by. The disparity between these two groups might leave you wondering if it’s actually possible to make a living off DoorDash. 

The truth is, there’s no direct answer to the question. Like any gig-based platform, DoorDash offers both opportunities and challenges that can significantly influence your earnings. Income could go either way depending on your environment, strategies, market demand, equipment, etc.

In this guide, we'll dissect all those payment parameters, lay out the corresponding business expenses, and give you the tools to calculate whether DoorDash can truly sustain your lifestyle and financial aspirations.

How much do you need to “make a living”?

The amount you can earn from DoorDash will vary a lot, so let’s start with the easier question. How much do you actually need?

Let's look at the average U.S. living expenses – from $30,000 for a single individual, $50,000 for couples, and around $75,000 for a standard household.

These could be used as standard yardsticks for estimating the cost of your basic needs. To be sure, though, we’d recommend that do the math while considering the following factors:

Locality

Living costs can differ significantly across regions. For example, San Francisco, with its notoriously high housing costs, will demand more of your income than a smaller Midwest town.

Earning $50,000 could provide a comfortable lifestyle for a single person in a city like Omaha, Nebraska. But, in San Francisco, that same amount might only cover essential expenses, leaving little room for savings or extras.

For Dashers keen on understanding how their earnings measure up against local living costs, we’d recommend referencing BankRate’s Cost of Living Calculator or Numbeo’s Cost of Living Index. They both offer insights into regional expenses, which may help Dashers gauge how far their income might stretch.

Your lifestyle

Personal choices also greatly influence your monthly expenses. If you're someone who enjoys dining out frequently, attending concerts, or traveling, your expenses will naturally be higher than those with more frugal habits.

To manage the unpredictable nature of gig work earnings, you must set up a strategic budget for your personal expenses. Tools like Mint or YNAB (You Need A Budget) will help you with that, as well as provide tools for tracking expenses, setting financial goals, and saving efficiently.

“If you don't set a budget, you are planning to fail, because you failed to plan,” emphasizes Scott Jones, a veteran Dasher with over five years under his belt. 

Another tip for DoorDash drivers is to avoid seeking immediate gratification. You should, instead, focus on long-term financial aspirations like buying a home, traveling extensively, or securing a comfortable retirement. These goals can all be achieved with careful management of your DoorDash earnings. 

Family composition

Financial dynamics change with every additional family member. A couple might comfortably live in a two-bedroom apartment, but children demand more space and, consequently, higher housing costs. More family members additionally means increased utility consumption and a heftier grocery bill. 

There are also future financial obligations to consider. College funds, for instance, require consistent contributions over the years. The same applies to planning family vacations. To achieve such goals, you’ll need a well-structured structured financial strategy and disciplined savings.

Ryan Shaw himself is a family man with two kids, and he recommends setting up maybe one or two extra savings accounts. “Ideally you should have two or more of such accounts. One is strictly for unexpected emergencies related to your car, and the other could be an extra stash you could dig into from time to time if needed.”

DoorDash itself offers the flexibility to adjust your income generation according to those goals. But, the unpredictability of its earnings may make it difficult to plan family responsibilities with surety. Dashers with growing families should thus consider supplementing their DoorDash income with other sources.

Having a Dasher as a partner makes workarounds much easier. Scott suggests creating alternating shifts so you can both grow your incomes and still make enough time for family responsibilities. 

“Back a few years ago, I was waiting for an order at Applebees, and this other Dasher was waiting, too. We got to talking,” he explains. 

“She told me, both she and her husband had quit good-paying normal jobs to do full-time DoorDash. He would work from 6 am to 2 pm, and then she would take over from around 4 to 10 pm. One parent would do breakfast, the other would do dinner, and every few months they would switch.”

“This meant they were both there when their kids got home from school every day.”

How much can I earn doing DoorDash?

So you probably want to take home somewhere between $20,000 and $50,000 a year to spend on your expenses. How does your potential DoorDash income stack up against that?

DoorDash's payment structure consists of three main components: Base Pay ($2-10 per order), Promotions, and Tips. Your final actual earnings can vary widely due to these influencing factors:

• Consumer Demand: Just like any business, DoorDash operates on the principles of supply and demand. Areas with numerous restaurants and a strong culture of ordering in, often experience higher order volumes.
• Dasher Density: In areas with many Dashers, the orders might be abundant. But, they're split among more drivers, potentially leading to longer wait times between deliveries. That is so true!” confirms Faith McLaughlin, who’s been on the job for a little over one year now. “If the market you live in is oversaturated with drivers, you might get fewer dashes even while sitting in a busy hot-spot zone. It’s happened to me a few times.”
• Working Hours: Peak times like lunch, dinner, weekends, or special events typically witness a surge in orders. Strategically working then could mean minimal idle time and a steady stream of deliveries. Off-peak hours, on the other hand, might offer a more relaxed pace but with fewer orders. “You have to find the hotspots,” insists Scott. “There’s always going to be a certain diner, mall, or hangout that is really hot at a certain time, with a lot of potential for tips.”
• Customer Service: A stellar service often attracts favorable tips. Your earnings grow by maintaining timely deliveries, friendly interactions, and going the extra mile.

You’ll need to account for your expenses

Just as a cafe owner deducts expenses like rent, utilities, and supplies from their total revenue to determine profit, a Dasher must account for operational costs to gauge their true earnings.

Tools like QuickBooks Self-Employed or Stride make this process especially easy for you. They can automatically track your mileage, calculate potential tax deductions, and even estimate the tax liability.

Some of the key expenses to factor in include:

• Vehicle-Related Expenses: With the average Dasher’s car getting 25.4 mpg and a gallon of gas priced at $3.58, the cost of gas per mile is $0.14. If you're driving an economical 5+ year old car, depreciation might further cost you around $0.10 per mile. Add in regular maintenance, which averages $0.0968 per mile, and you'll be looking at about $0.34 for every mile driven. So, for a Dasher covering 100 miles per day, the daily operational cost for the vehicle will be at least $34.
• Health Insurance: Unlike traditional employees, gig workers must cover their own health insurance. Premiums can vary, but expect to pay $10 or less per month on Stride – based on coverage and individual health conditions.
• Rideshare Insurance: Standard car insurance doesn't cover commercial activities like DoorDashing. You'll need rideshare coverage instead, which goes for $100 to $300 annually. 
• Taxes: As a self-employed DoorDash contractor, you're your own boss. Depending on income bracket and state, this could mean setting aside 15% to 30% of your funds for tax obligations. You should also follow up on the corresponding tax deductions for gig workers - many Dashers report being able to reduce their tax bill to zero by taking the right deductions. As Scott puts it, “Your taxes will either ruin you, or make you in this gig economy.”
• Miscellaneous Costs: Other potential costs for DoorDash drivers might include items like phone mounts, car chargers, delivery bags, phone bills, or even thermal clothing for colder climates. “Another hidden cost is car washes and vacuuming or cleaning to keep your ride looking and smelling nice,” adds Faith . 

Estimating your net pay

To determine what you'll truly take home:

1. Start with Gross Earnings: This is the total amount you earn before any deductions. It includes your base pay, tips, and any promotional earnings.
2. Subtract Work-Related Expenses: Deduct all the costs associated with doing the job. This includes gas, vehicle maintenance, phone bills, health insurance, rideshare insurance, and any other equipment or tools you might need.
3. Account for Taxes: Deduct the estimated tax amount. And while you’re at it, remember that you can claim work-related expenses as deductions.

The result after these deductions gives you your net pay – the actual amount you get to keep and spend. 

Examples: What actual DoorDashers are earning

We’ve broken down three real-life examples of Dashers' earnings in our guide to working DoorDash as a full-time job. We’ll summarize it here, but head over there to see the detailed math behind it.

Here’s how Ryan, a 31-year-old Dasher with over four years of dashing experience, reports his income:

• Gross Earnings: Ryan averages a base pay of $2.50, tips of $6.30, and completes roughly 1.7 deliveries per hour. This translates to about $15.06 hourly. In an 8-hour day, he can accumulate $120.48, and over a year (280 days), he can gross $33,734.40.
• Expenses: Covering about 100 miles each day, Ryan's vehicle costs him $34 daily or $9,520 annually. Add in his health insurance ($623) and rideshare insurance ($1,080) premiums, and the total expenses come to $11,223.

Net Pay: When you subtract those expenses from his gross earnings, Ryan's annual take-home pay could be around $22,511.40. 

Scott, an Oregon-based DoorDasher, has been in the game a year longer than Ryan. Here’s what his earnings might look like by the end of the year.

• Gross Earnings: Scott's base pay average stands at $7, with tips adding another $2. 2.5 deliveries every 60 minutes will earn him an estimated $22.50 hourly. And if he dashes for 4 hours daily, he'd make $90, which over 300 days, translates to $27,000.
• Expenses: Scott drives about 50 miles daily, incurring vehicle costs of $17 per day or $5,100 annually. His only other significant expense is the rideshare insurance, which costs him $240 semi-annually.

Net Pay: After deducting his expenses, Scott's projected annual income is $21,660.

Faith has been in the gig work scene since 2016. She operates out of Santiago with the following stats: 

• Gross Earnings: With an impressive base pay of $11.50 (perhaps helped by California regulations) and tips averaging $5.85, Faith earns about $22.55 for every delivery. At 1.3 deliveries an hour, she could make about $29.31 hourly. Then in an 8-hour workday, she might earn $234.48, and over 260 days, her annual gross could reach $60,964.80. 
• Expenses: Faith covers 75 miles daily, which would cost her roughly $25.50 each day or $6,630 annually. Health insurance bills amount to $576 and rideshare coverage goes for $1,200, pushing her yearly expenses to $8,406.
• Net Pay: After accounting for the expenses, Faith's annual net income would be a commendable $52,558.80

So with these three Dashers being able to take home anywhere from $20,000 to $50,000 - it’s clear why you first need to know how much you need. Taking home $40,000 might not be a “living” if you’re out spending $60,000 a year. But it’s great if you’re only spending $20,000.

Can you make a career out of DoorDash? 

Even though the gig economy offers unparalleled flexibility, it lacks the structured career progression of traditional jobs. There are no corporate ladders to climb or promotions to secure.

Rather than seeing it as a permanent career, view DoorDash as a financial tool to achieve broader goals. It could fund further education, provide seed money for a business, or serve as capital for investments.

Dashing also hones valuable soft skills. Managing multiple deliveries improves your time management. Engaging with a diverse range of customers enhances communication skills. What’s more, the challenges that come with the job will teach you quick problem-solving.

“DoorDash even gives you the discipline to stick to goals and follow through on commitments,” explains Faith. “And the benefits of that extend to all careers.”

Another often-overlooked perk of being a Dasher is the potential for networking. Daily interactions with restaurant staff and customers can open doors to job offers, business partnerships, or investment opportunities.

Get started

Whatever venture you choose to pursue, at least DoorDash is flexible to allow you to change your approach at any time. And, you’ll appreciate the extra income. Sign up today to start maximizing your earning potential (pending Dasher approval and local availability).