DoorDash on Tuesday unveiled new pricing changes designed to better support restaurant partners, the company said. Beginning Tuesday, all U.S. local restaurants will have a choice of three different delivery commission price points with new Partnership Plans, starting with a 15 percent option. Additionally, DoorDash is lowering Pickup commission costs to 6 percent and making Storefront, a commission-free online ordering product, free (except for payment processing fees) for all restaurant partners. Inspired by feedback from restaurants, these actions are intended to create more choices and solutions across a portfolio of restaurants’ needs and put more profits into the pockets of local businesses.
“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,” says Christopher Payne, COO of DoorDash. “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.”
Improving DoorDash Pricing With More Choices for Local Restaurants and Lower Pickup Fees
To empower every restaurant to meet their individual goals, 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 included. Restaurants will also always have the flexibility to update their Partnership Plan selection to accommodate their evolving needs.
DoorDash Basic (15 percent):
Basic is the most cost-effective way for restaurants to offer delivery and pickup to customers on DoorDash.
Restaurants can continue to opt into additional in-app marketing programs as desired to reach even more customers.
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 percent):
Plus helps restaurants grow orders and new customers through access to our most loyal customers as part of DashPass, an expanded delivery area, and reduced delivery fees for customers.
DashPass is an industry-leading customer loyalty program, the company said. Restaurants who participate in DashPass get increased visibility in the app, and DashPass customers pay reduced fees when they order from participating restaurants. Because DashPass customers order more often, participating restaurants see increased growth.
DoorDash Premier (30 percent):
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 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.
New Pickup Pricing (6 percent)
DoorDash is also reducing Pickup commission to 6 percent across all restaurant partners and plans so they can leverage the reach of the DoorDash Marketplace and connect directly with customers in their neighborhood. This rate includes payment processing.
“Jai Meals operates out of a local mall, so delivery has been an important part of how I have made up for lost income over the past year of dine-in closures. Despite this, my previous commission didn't work for my business; it was hard to absorb that high of a cost, especially when delivery became a large percentage of my orders,” says Sherry Copeland, owner of Jai Meals in Plano, Texas. “With the Basic plan, I can offer delivery to customers, who increasingly enjoy the convenience delivery provides, but at a cost that is more aligned with my products, my goals and my customers’ needs.”
“We are a new restaurant who just opened our doors in December of last year. 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,” adds Bethan Johnson, co-owner of PizzaCo in Kokomo, Indiana. “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 short, interactive quiz about their business and their goals to identify which tier works best for them and find more information on the plans, here. On May 4, restaurant partners can join DoorDash executives for a Town Hall event to ask questions on the new Partnership plans and the latest product offerings.
Giving restaurants the power to create their own online stores, commission-free
DoorDash Storefront is a product that enables any restaurant to turn their website into an ecommerce store. Delivery orders placed directly through the restaurant’s online store are fulfilled using DoorDash Drive. Since its launch last May, thousands of restaurants have used DoorDash Storefront to offer delivery and pickup to their customers, owning the customer relationship end-to-end and turning website visits into sales, all without paying a standard commission fee.
It’s important for restaurants to build their own online channels. That’s why DoorDash is eliminating the one-time set-up fee, monthly software fees, and per-order merchant delivery fees for Storefront, and restaurants will only pay a payment processing fee on all Storefront orders. Storefront is available to all restaurants in the U.S., regardless of whether they are partnered with DoorDash on Marketplace.
“We currently use Storefront across nine of our locations. Over the past year, when every order and dollar counts, Storefront has saved some of our businesses - enabling us to convert website traffic to sales without any commission fees,” says Tyler Kaune, Director of Strategic Technologies at LM Restaurants. “With Storefront, DoorDash is taking what it has built over 8 years and making it available for its small business partners, and now, with reduced fees. This is a game changer for us and so many other independent restaurants who are looking to build their own online ordering platform.”
Continuing Main Street Strong Initiatives To Help Restaurants Today and Tomorrow
Over the past year, DoorDash has rolled out several relief and support initiatives as part of its Main Street Strong program to help independent restaurants globally navigate the challenges of operating during a pandemic. This includes:
Providing over $120 million dollars in commission relief and marketing support to restaurants at the beginning of the pandemic including temporarily reducing commissions by 50 percent for restaurants with five or fewer locations;
Creating or accelerating new products and services to support restaurants such as Storefront, Daily Pay and Self-Delivery; and
Announcing a five-year, $200M Main Street Strong Pledge to support merchants, Dashers and local communities including a $10 million restaurant grant program and restaurant Accelerator program for restaurants that have been disproportionately impacted by the COVID-19 pandemic.
Moving forward, feedback and accountability are important to continue delivering solutions to restaurant partners. In continuation of Main Street Strong, DoorDash will be appointing a Chief Restaurant Advisor who will work in an integrated advisory role, acting as a “Voice of the Industry” within DoorDash and as an influential liaison between DoorDash and the restaurant industry. As the world begins to reopen, DoorDash will continue to listen to restaurant partners and take additional actions to build a better, more fair relationship with local restaurants.