Covid lockdowns were the best of times and worst of times for food delivery companies like Door Dash, restaurants dependent on take out and deliveries for survival and consumers grateful to get restaurant food. But it put third-party delivery company pricing policies front and center, and neither customers, restaurants nor drivers were happy with that they saw while the delivery companies raked in the cash.
“I would always advise a consumer, if you want to get delivery food from a restaurant, go directly to that restaurant. That is the best way to support the restaurant, whether that is calling them directly or going to their website,” suggests Anna Tauzin, Chief Revenue and innovation Officer for the Texas Restaurant Association. Restaurants, she explains, a low margin business that when prosperous may make 5% over expenses, sometimes have to pay those delivery services up to 30% the cost of an order, an expense not compensated by the consumer. Though that may change.
Door Dash has announced a change in policy, transitioning to a tier of pricing options for restaurants to better accommodate their needs. It gets technical and may be filed under TMI, but they have three tiers from which restaurants can select, with commission rates between 15-30%. Even 15% commission is pretty high a price to pay. Businesses can also select options for smaller delivery areas covered and less marketing. Businesses are trying to figure out how much of the cost they will absorb and what will be passed directly to consumers.
The problem has been that as Door Dash offers options to others, including restaurants and drivers for their delivery service, they aren’t making any changes in their practices or bottom line, not expecting this to impact their earnings in any way.
photo: Getty Images