DoorDash envisions post-COVID era with new fee structure for restaurants
DoorDash (DASH) announced new pricing plans for pickup and delivery on Tuesday, as local restaurants and customers plan for life after COVID-19 lockdowns.
As rising vaccination rates lead more people to dine indoors, the delivery app has responded to criticism that its prices are too high for some merchants, unveiling three options for participating restaurants on its platform.
A “basic” plan comes with a 15% commission rate on deliveries designed to transfer “a higher portion of the cost of delivery to the consumer, and enables select delivery.”
A “Plus” plan includes a 25% commission rate, as well as an “extended delivery area” that reduces delivery costs for customers. It also comes with an option to participate in DashPass, the delivery platform’s loyalty program. Finally, a “Premier” option includes a 30% commission rate “to maximize the number of new customers and the total volume they receive from DoorDash”, as well as the lowest customer fees and the largest delivery area. .
DoorDash also plans to reduce its pickup commission to 6% for all partners and catering plans, “so they can leverage the reach of the DoorDash marketplace and connect directly with customers in their neighborhood,” said the society.
“There is a huge and increasingly digital opportunity for small restaurants, and we believe that when we work together, we can help them capture more of this market in a post-pandemic world – in-store, online. , through a third-party partner, or any combination of the three, ”Christopher Payne, COO of DoorDash, said in a statement.
“We hope that as they reopen their doors for dining, we can be a partner that will help restaurants accelerate into the future and continue to grow,” he added.
Delivery apps, which gained popularity during pandemic lockdowns, have also taken the heat for extremely high service charges. Last year, platforms like DoorDash, UberEats, Postmates were slapped with a class action lawsuit for “shocking” service charges that left restaurants and even users reeling from the stickers. Stung by critics, DoorDash responded by posting a lengthy explainer about its fees and defended its role in helping restaurants stay afloat.
“The odds of staying in business are 8 times better for restaurants in DoorDash compared to all restaurants in the United States,” a spokesperson for Yahoo Finance recently told.
In February, Prabir Adarkar, Chief Financial Officer of DoorDash, told Yahoo Finance: “We provide restaurants with a variety of products and services because the needs and challenges facing restaurants are unique and differ from restaurant to restaurant. ‘other … it is this varied approach or this merchant priority that has led restaurants to have a greater likelihood of staying in business on our platform. “
The company, which acquired Caviar at the end of 2019 and currently has more than 20 million consumers on the platform, had 273 million total orders in 2020, a staggering 233% increase from a year ago. , as take-out had skyrocketed during the lockdowns.
The company recorded more than $ 8 billion in gross order volume in the market, an increase of 227% from the previous year. It also remains the top food delivery app as of Feb.22, capturing 53% of the U.S. market, up 16% from early 2020, according to Edison Trends.
DoorDash will release its first quarter 2021 financial results after market close on Thursday, May 13, 2021. Shares in the stock are up nearly 6% on Tuesday at noon.