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DoorDash data breach didn't put a big dent in food delivery service's business

A lot of users still kept their DoorDash accounts.

DoorDash logo.
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DoorDash's customers have still been sticking with the food delivery app, even after the company revealed in September that 4.9 million users, merchants and delivery workers were impacted by a data breach.

During The Wall Street Journal's tech conference in Laguna Beach, California, DoorDash CEO Tony Xu was asked if the company saw any customer cancellations after the breach. 

"It was a negligible customer impact, but it's a very big problem. You know, the issue of security is one that we take very seriously," Xu said. 

Customer information, including emails, delivery addresses, phone numbers and passwords, were exposed in the data breach. So were the last four digits of some consumers' credit card and bank account numbers, but DoorDash said the information isn't enough to make a fraudulent purchase.  

Security concerns aren't the only woes facing the on-demand food delivery service.

The company faced criticism earlier this year for a policy that led to some tips for delivery workers ending up in the hands of the company.

In response to the public outcry, DoorDash said in July it was changing the policy, but workers complained nearly a month after the announcement that their pay and tips haven't changed. 

The controversy underscores a growing backlash against on-demand services including DoorDash, Uber and GrubHub as they grow more popular. Workers, which are classified as contractors, have complained about low pay and lack of benefits. 

DoorDash has 400,000 delivery workers that the company calls "Dashers."

Under the company's old policy, worker tips went toward a minimum DoorDash paid workers for each delivery instead of directly adding the tip to a worker's pay. DoorDash said that the policy was meant to boost pay for workers when a customer left little or no tip. Xu said the company decided to change the policy after some customers said that they felt like their tips didn't matter.

Under the new policy, all of a customer's tip would go to the delivery worker. 

Xu also expressed concern about legislation called AB5 that could force companies such as DoorDash to reclassify their contractors as employees. The bill was signed into law by California Gov. Gavin Newsom in September but Uber, Lyft and DoorDash are sponsoring a ballot initiative in November 2020 that would exempt them from the law.

The bill has good intentions, Xu said, but it could result in rising costs for consumers. Drivers also might not get the flexible work hours they want, he said.

"While I think the goals are great, I think that there are better solutions," he said.