DoorDash lowers some fees for restaurants

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A delivery person for Doordash rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City

By Hilary Russ

(Reuters) – DoorDash Inc, the largest U.S. third-party food delivery company, on Tuesday said it lowered some fees for restaurants to use its platform after many have struggled to stay in business during the recession.

The company will allow restaurants to choose three tiers of service – including its lowest “basic” plan that costs a commission of 15%.

DoorDash and rivals, including Grubhub Inc and Uber Eats, have come under fire for commissions as high as 30% charged to independent restaurants, prompting some cities to cap the fees during the pandemic.

Under DoorDash’s new pricing system, eateries can still choose to pay high delivery commissions to DoorDash in exchange for more marketing, a wider delivery radius and better placement in the app, Chief Operating Officer Christopher Payne said in a call with reporters on Monday.

Fees for pickup orders placed through the app were also lowered to 6% from about 15%, among other reductions.

The changes will have no impact on DoorDash’s revenues or on how much money its delivery drivers make, Payne said. He did not say how the company might make up for any reduced revenues.

DoorDash waived commissions in the early months of the pandemic and provided other relief totaling $120 mln. Commissions have faced increased scrutiny with deliveries rising as people stayed home, while restaurants struggled to stay afloat.

(Reporting by Hilary Russ; Editing by Dan Grebler)

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