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Food delivery fees could be capped at 15% under proposed city council legislation
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DoorDash, UberEats, and GrubHub Are Facing Permanent Fee Caps
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Nossa, a southern Brazilian restaurant in Los Angeles, opened in January when the city was still in lockdown. At that time, offering food to go was the only option, and director of operations Xandre Borghetti was happy to use big delivery companies to support the business’s launch.
“During the pandemic, I was talking to every single restaurant person I know across the industry, and I said you should always be optimizing for delivery and you should always be thinking about diversifying revenue streams,” he said. “And I still stand by that. But when I step back and look at the bigger picture, I’ve seen from an operational standpoint that it’s not quite that easy.”
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.
April 27th, 2021
Carlo Allegri / reuters
Food delivery apps have long been criticized for the typically high commission rates they charge restaurants. In an industry where the profit margin is said to be
The exact commission rates these apps charge haven t always been entirely clear. However, DoorDash has taken a step toward greater transparency. The company has introduced a tiered commissions system for local restaurants in the US for both DoorDash and Caviar.
Under the DoorDash Basic plan, restaurants will pay 15 percent commission and move a higher proportion of the delivery cost to customers. Their delivery area will be smaller than that of restaurants on higher-tier plans to ensure that Dashers continue to make meaningful earnings. Restaurant owners can still take part in marketing programs to promote their business.
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