New fee structure at Doordash could cost customers more
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Doordash is attempting to give restaurants more control over the fees it charges following widespread pushback by mom-and-pop restaurants over delivery-app economics.
The food delivery company on Tuesday rolled out a new a la carte menu of services as it braces for more people to eschew takeout in exchange for sit-down dining.
The new commissions will allow restaurants to choose to pay as little as 6 percent of an order, rising to 15 percent, 25 percent and 30 percent, depending on their needs. Previously, restaurants were forced to negotiate their fees, which led to many smaller restaurants forking over 30 percent of every food order to a tech giant simply because customers chose to order their food via a website or app instead of calling the restaurant directly.
“DoorDash is thrilled to offer new and better options that empower businesses to pick and choose the products and services they want and need,” Doordash’s government relations executive, David London said in a statement.
But San Francisco-based company’s new fees will cost consumers.
Customers of restaurants that choose the least expensive Doordash service will get whacked with a $5 delivery fee while customers of restaurants who choose the cadillac version will only pay $2 for delivery.
The new fee structure comes as the relationship between the restaurants and delivery companies, including GrubHub and UberEats, has become strained in recent years. In 2019, for example, restaurants were outraged after The Post exposed a system of bogus fees GrubHub had been charging eatery owners for orders that never took place.
After the pandemic hit, many cities governments, including NYC, mandated that delivery apps charge no more than 15 percent per order in an effort to help the restaurant industry survive state-mandated lockdown orders. Most of the fee caps are temporary, but some legislators are eyeing making them permanent, according to industry sources.
The delivery companies fought the pandemic caps, arguing that consumers would wind up paying more and that restaurants would lose business. In fact, many delivery companies did better than ever during the pandemic as stuck-at-home consumers turned to delivery more often for their meals.
“This is us listening to our merchant partners and making adjustments,” chief operating officer Christopher Payne said according to a Wall Street Journal report. “Essentially we’ve been learning together about what restaurants need and testing our way into what the next phase of pricing should be.”
Shares of Doordash were up by more than three percent Tuesday morning.
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