DoorDash commission fees may increase for slow restaurants. Will that result in higher food costs for app users?
Due to increased costs, more consumers are paying attention to how much they're spending on food and other expenses. If you're someone who utilizes food delivery and pickup apps, you may want to keep a close eye on your order totals.
Some restaurants and eateries will be paying additional commission fees to DoorDash in 2023. Does this mean consumers may pay more for delivery orders?
When you order delivery through delivery apps, you want to receive your food quickly. Delivery app companies also want speedy delivery. After all, faster orders make customers happy and encourage continued app usage.
DoorDash may begin to penalize eateries that take too long to complete food orders because it makes the entire delivery process take longer. Eateries that are slow to process orders could pay higher commission fees.
Slow orders will cost McDonald's money
DoorDash and McDonald's have a new financial agreement in place for 2023. For orders placed by DashPass subscribers, the app will charge McDonald's a 14.1% commission fee. For orders placed by non-subscriber app users, the app will charge McDonald's an 11.6% commission fee. These new fees are lower than the current commission fee rates the fast-food giant pays.
But McDonald's will be penalized for slowing down the delivery process, which means they could shell out a lot more money. Beginning next year, if a DoorDash delivery driver has to wait more than seven minutes for an order to be ready, McDonald's would pay commission fees as high as 20.1%.
These additional fees could encourage McDonald's and other eateries to prioritize delivery app orders and order speed. Faster order speeds could make delivery app users more inclined to continue to use these apps in the future.
While this may not seem like a lot of money for a fast-food chain, the additional fees could add up over time, especially because delivery apps are becoming more popular, and the total number of orders may grow in the coming months and years.
Will your DoorDash orders get more expensive?
It's worth noting that these additional commission fees are fees that McDonald's will pay. But could this eventually translate to higher prices on the customer end? It's possible.
Many restaurants and eateries list the price of menu items higher on delivery apps like DoorDash. They do this to help offset some of the commission fees. That means you may be paying a higher price for your food than if you were to order directly from the restaurant.
As DoorDash signs new contracts with eateries, the in-app menu prices you see could rise. If you're a frequent delivery app user, take note of the prices you're paying now. You can track pricing to see if you're paying more a few months from now.
However, restaurants may increase menu prices for other reasons, such as making up for higher food costs. To save money on takeout, you may want to order directly from local eateries. Some restaurants offer free local delivery. Another option is to pick up takeout orders to avoid delivery fees.
Will DoorDash and other delivery app costs continue to increase for consumers? We'll have to wait and see. If you're looking for ways to save money in your everyday life or want to make smarter financial choices, check out these personal finance resources.
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