Delivery

DoorDash changes pricing, offers 15% commission option

DoorDash is launching a sliding scale pricing structure for local restaurants that it says is intended to give operators options to make more money and adjust the third-party delivery provider's level of support to their needs.

DoorDash is changing its pricing game. (Photo: iStock)

April 27, 2021

DoorDash today unveiled pricing changes which the company said are designed to better support restaurant partners by giving U.S. local restaurants a choice of three different delivery commission price points for its Partnership Plan. In fact, the plans start with a 15% option, according to a press release.

Additionally, DoorDash is lowering pickup commission costs to 6% and making its commission-free online ordering product, Storefront, also available for just the cost of payment processing for all restaurant partners. The company said the actions are intended to create more choices and profit for operators.

"There is a massive, increasingly digital opportunity for small restaurants, and we believe that when we work together, we can help them capture more of that market in a post-pandemic world –– in-store, online, through a third-party partner, or any combination of these three," DoorDash COO Christopher Payne said in the release. "Over the past year, we've introduced offerings to help restaurants define their own futures.

"Today, we are changing how we do business to provide more choices, and better choices, for restaurants. We are hopeful that as they reopen for indoor dining, we can be a partner that helps restaurants accelerate into the future and continue growing. That's the most important service DoorDash can offer."

All local, U.S. restaurants on both DoorDash and Caviar will have a choice of three different partnership plans, with commission rates that vary based on the level of marketing support. Restaurants will have the flexibility to update their partnership plan selection to accommodate evolving needs. The offerings include:

• DoorDash Basic (15%): Under this plan, restaurants can continue to opt into additional in-app marketing programs, as desired. This plan shifts a higher portion of the delivery cost to the customer and adjusts the delivery area for restaurants in order to ensure that Dashers continue to make "meaningful" earnings.
• DoorDash Plus (25%): Plus helps restaurants grow orders through access to DoorDash's most loyal customers as part of DashPass, as well as an expanded delivery area and reduced delivery fees for customers. Restaurants who participate in DashPass get increased visibility in the DoorDash app, and DashPass customers pay reduced fees when they order from participating restaurants. The goal is that restaurants see sales growth because DashPass customers have been shown to order more often.
• DoorDash Premier (30%): Premier helps restaurants maximize the number of new customers and the total volume they receive from DoorDash. It offers the lowest customer fees and the largest delivery area, in addition to the benefits of DashPass. Additionally, DoorDash premier comes with what the company called a growth guarantee. For all restaurants on the premier plan that accept fewer than 20 total orders per month across pickup, delivery and Caviar, DoorDash will refund their full commission for that month if they cancel fewer than five orders that month and maintain "open hours" on DoorDash for 90% of the store hours that they have set in the merchant portal.
• Pickup Pricing (6%): DoorDash is also reducing pickup commission to 6% across all restaurant partners and plans to use DoorDash Marketplace's reach to connect directly with customers in a store's neighborhood. This rate includes payment processing.

"We are a new restaurant who just opened our doors in December of last year," Bethan Johnson, co-owner of Kokomo, a Indiana-based PizzaCo, said in the release. "To help grow our business, we partnered with DoorDash in March, and have been excited by the early reception from local customers. We are seeing incredible sales and growth through the app, and even Dashers are coming back to order their dinner after they complete a delivery.

"As a new business, we can't predict what six months or a year will look like or what our needs will be. Right now, the premier plan makes sense for us to continue growing, but it's great to have the option to move to a plan that might be better aligned with our future goals. That flexibility is key as we are just starting out."

Restaurants can take a quiz about their business and goals to identify which tier is the best fit and on May 4, restaurant partners can join DoorDash executives for a town hall event to ask questions on the new partnership plans and how to approach them for their business.

DoorDash serves restaurants in more than 4,000 cities and all 50 states across the United States, Canada, and Australia. It is based in San Francisco.