Restaurants

DoorDash eliminates and reduces some commission fees for restaurants

Key Points
  • DoorDash said Tuesday that it would eliminate or reduce some commission fees for restaurants.
  • States across the country are mandating that restaurants and bars close their dining rooms.
  • Restaurants can pay commission fees as high as 30% on orders delivered by third-party aggregators.
A DoorDash Inc. delivery person arranges an order in the back of a vehicle outside of a DoorDash Kitchens location in Redwood City, California, U.S., on Friday, Nov. 29, 2019.
David Paul Morris | Bloomberg | Getty Images

DoorDash said Tuesday that it would eliminate or reduce some commission fees for restaurants as states across the country mandate closing dining rooms.

Restaurants can pay commission fees as high as 30% on orders delivered by third-party aggregators like DoorDash and Grubhub. Even before the coronavirus pandemic, restaurateurs were complaining about the pressure the fees put on their profits, leading the New York City Council to propose capping fees at 10%. Grubhub said Friday that it would temporarily suspend up to $100 million in commission fees for impacted independent restaurants.

DoorDash said that beginning Tuesday through the end of April, independent restaurants in the U.S. can sign up for DoorDash and Caviar and pay zero commissions on orders for 30 days. Existing DoorDash restaurant partners will not pay commission fees on pickup orders. Delivery commission fees will also be reduced for eligible restaurants that have already partnered with DoorDash.

The delivery company also said it would add more than 100,000 independent restaurants to its subscription program for free. Consumers pay a flat monthly fee in order to not pay delivery fees on every order. Restaurants already on the program will receive reduced commission fees. DoorDash is also earmarking up to $20 million for restaurant marketing programs to generate more revenue for its existing partners.

In addition to commission fees from restaurants, DoorDash also receives revenue from delivery fees paid by consumers and other fees paid by restaurants, like for marketing. The delivery service confidentially filed for an initial public offering in late February.

VIDEO6:1406:14
This is our generation's World War II moment: Restaurateur Tom Colicchio