Third-party delivery company DoorDash is launching a new, tiered pricing structure designed to give restaurants more flexibility in how they use the service.
It is also lowering the cost of pickup and its Storefront native ordering product based on feedback from restaurants.
Starting today, restaurants will be able to select from one of three payment plans that offer varying levels of marketing and other features. The options are:
- Basic: 15% commission per delivery. Marketing and delivery radius are limited, and the customer pays a higher fee.
- Plus: 25% commission. Marketing and delivery radius are expanded, and restaurants are included in the DashPass subscription service and distinguished with a badge within the app.
- Premier: 30% commission. This plan offers the largest delivery radius and the lowest customer fees, along with inclusion on DashPass. It also guarantees at least 20 orders per month across pickup, delivery and Caviar, or DoorDash will refund the restaurant's commission for that month.
Marketing includes things like more visibility in in-app carousels and search results as well as delivery radius and DashPass badging. Restaurants can still pay for one-time marketing promotions as well.
Previously, all plans started at what is now the Premier level and could be adjusted from there, said DoorDash COO Christopher Payne on Monday during a call with media. Now, restaurants can more easily choose a plan based on their needs, and can toggle between plans as often as they want.
"With Basic to Premier, it’s a choice between balancing profitability and growth, and the restaurant can pick the appropriate spot along that continuum," he said.
Restaurants can select their pricing plan within their DoorDash merchant portal.
Another significant change involves commissions for pickup orders, which will now be 6% instead of 15%, including credit card processing. And DoorDash is also getting rid of setup and installation fees for Storefront, which allows restaurants to offer a native web ordering experience. Restaurants will only be responsible for Storefront transaction fees.
The changes are in response to restaurants' calls for more flexibility and transparency around fees, said Katie Egan, the company's head of B2B product marketing.
Even before the pandemic began, restaurants had been speaking out against the fees and commissions charged by third-party delivery companies. The virus and ensuing dining room shutdowns exacerbated those frustrations and led to temporary delivery fee caps in dozens of cities and counties.
The new pricing is not a response to those caps, Payne said, which typically land at 15% or 20%. The company will continue to comply with local regulations, even if a restaurant chooses a higher-tier plan, until they expire.
The plans are not expected to affect revenues for the newly public company.
"We believe that this will have a negligible impact, no impact, really, on our economics, nor on [driver] earnings," Payne said.
Restaurateur Bethan Johnson said the extra visibility provided by DoorDash has been a big help since she and her husband opened PizzaCo. in Kokomo, Ind., in December.
The Neapolitan-style joint is going with the Premier plan for now, to help stand out in a competitive pizza market. But Johnson likes the fact that she can switch plans at any time.
"I don't know what month to month is going to bring right now, and that’s just been a good comforting thing to know that that’s available," she said during Monday's call.
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