- DoorDash Inc DASH has introduced three new tiers of commission for the restaurants for different service levels based on profitability or growth requirement, the Financial Times reports.
- U.S. legislators levied temporary caps on the fees last year to help the ailing restaurant industry retain a larger chunk of their profits during the pandemic, Bloomberg reports
- DoorDash’s basic plan charged a 15% commission and included delivery and pickup services. This plan shifted a higher portion of the delivery cost to the customer and reduced the delivery area for profitability.
- The next plus tier commission of 25% included an extended delivery area and access to customers on DashPass, a subscription-based loyalty program offering reduced service fees from participating restaurants. Restaurants projected growth from higher order volume.
- The premier plan charged a 30% commission for the lowest customer fees and the largest delivery area along with DashPass benefits. It focuses on customer acquisition and order volume growth.
- DoorDash refunded restaurant commissions for less than twenty pickup and delivery orders. Pickup order commission was reduced from 15% to 6%. The company has eliminated the fees for setup, software, and merchant delivery for its online ordering product, Storefront.
- DoorDash had reported a loss of $312 million on revenue of $970 million in Q4FY20.
- DoorDash expects more restaurants to avail the 30% tier with the widest delivery radius, additional marketing, and app visibility.
- The new pricing structure has been tested over the last six months and is expected to have an insignificant impact on the company’s profitability and Dasher earnings.
- DoorDash will appoint a Chief Restaurant Adviser to work as a liaison between DoorDash and restaurants.
- Price action: DASH shares traded higher by 2.92% at $158.29 on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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