Technolgy Rules: DoorDash announces new pricing for restaurants, with commissions as low as 15%

Tuesday, April 27, 2021

DoorDash announces new pricing for restaurants, with commissions as low as 15%

DoorDash is announcing new pricing plans for the restaurants who use the platform for pickups and deliveries.

Before this, the company did not offer standardized pricing across restaurants. However, the question of how high delivery app fees might go (and how parsimonious the payments might be for restaurants as a result) prompted DoorDash to publish a long blog post about its fee structure last fall.

In fact, Oregon and Washington have passed caps on delivery fees, while lawmakers in California, New York and Texas have proposed similar caps. On a call with reporters to discuss the new pricing, DoorDash COO Christopher Payne denied that the company changed its pricing to appease lawmakers.

“This is not designed in response to legislation,” Payne said. “It’s designed in response to listening to restauranteurs and learning what they need.”

DoorDash now offers three plans to restaurants: DoorDash Basic, where restaurants only pay a 15% commission on deliveries, which shifts “a higher portion of the delivery cost to the customer” and supports a smaller delivery area; DoorDash Plus, where restaurants pay 25% to be part of DoorDash’s DashPass subscription program and get increased visibility in the DoorDash app; and DoorDash Premier, where restaurants pay 30% in exchange for the lowest customers fees, the largest delivery area and a growth guarantee of at least 20 orders per month across pickup, delivery and DoorDash-owned Caviar.

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Across all plans, DoorDash says it will now charge only a 6% commission on pickup orders.

The company’s announcement includes statements from restaurant owners who are adopting the new plans. For example, here’s Sherry Copeland, owner of Jai Meals in Plano, Texas:

Jai Meals operates out of a local mall, so delivery has been an important part of how I have made up for lost income over the past year of dine-in closures. Despite this, my previous commission didn’t work for my business; it was hard to absorb that high of a cost, especially when delivery became a large percentage of my orders. With the Basic plan, I can offer delivery to customers, who increasingly enjoy the convenience delivery provides, but at a cost that is more aligned with my products, my goals and my customers’ needs.

Payne said these plans will become available to all restaurants on DoorDash today, although it may take up to five days for the new pricing to fully take effect. He added that DoorDash has been testing these plans over the past few months and that “we believe this will have negligible impact — no impact, really — on our economics, nor on Dasher earnings.”