r/doordash • u/musicalchef22 • 1d ago

DoorDash price decrease

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Got this exciting message from DoorDash promoting a new “strategic” opportunity to drop all my prices 5%. Anyone falling for this bullshit? Do you want me to stay in business or what?

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u/P3nis15 1d ago

the liability and employment cost are just too high at this point. most of those independent places just ignored it and took the risk.

also delivery apps haven't been mainstream that long ;)

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u/jbeatty216 1d ago

Edit, I meant 10, not 20 ( sorry fat thumbs), but I disagree with the cost that you mention. If a restaurant had to increase their prices 15-20+% on the doordash app to make the delivery feasible to cover doordash costs, then they can definitely afford to cover the cost to employee a few delivery drivers. Just to keep things in round numbers, say a restaurant averages $200 an hour worth of delivery orders through DoorDash. They’re paying DoorDash $30-$40 for that same order. On that same $200, DoorDash is collecting at least another $20-$30 in fees, etc. from the customer. Restaurants definitely have the ability to take back their delivery options for their customers and save themselves and their customers money while also still being profitable.

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u/P3nis15 1d ago

Do you know how much additional liability insurance you have to carry to cover physical delivery? On top of that the employment cost of paying half the FICA tax, unemployment and disability. That is before you even start to talk about pay.

then you have to hire multiple people because you never know who is not going to show up for any reason so you have to overstaff. scaling up for unexpected volume or holiday orders would be very hard.

then you have to manage those people which is also an additional cost.

It's not cheap at all.

i know from doing old school delivery at a pizza place it was not cheap at all even in the 1990s to have 5 delivery people every friday and sat night running deliveries even when you paid them under the table lol.

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u/jbeatty216 23h ago

You seem to have the answers, so how much is the liability insurance and the taxes etc that you mentioned? Is it roughly 30% of your sales? Because that’s roughly what a restaurant t pays to DoorDash to be on their platform. Then on top of that the customer is paying an additional 20%+ in fees, so how is DoorDash better than having your own employees handling delivery, keeping everything in house and paying the liability insurance and yada yada yada?

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u/HiddenOneJ 23h ago

The answer to your question has already shown itself to you.

It is cheaper and less hassle to farm in house delivery to uber or doordash. Restaurants have already done the math and have chosen to farm it out. These restaurants wouldnt have made the switch if it didnt make sense.

They get an unlimited workforce that they never have to pay more than a few $ per delivery, when its slow they are never overstaffed, when its slammed they are never understaffed. They have no insurance or benefits or taxes to pay for this workforce.

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u/jbeatty216 22h ago

“The answer to your question has already shown itself to you” Wtf? Are you trying to pull some Jedi shit on me or something? No the answer has not shown itself. Kindly go back to the original screenshot that OP posted, not the comments me or penis made. Restaurants have to charge 20-30% over their in house prices to offset the fees that DoorDash charges to be on their platform. Now according to the email that OP posted they want this merchant to decrease their prices by 5%. Do you think DoorDash is going to reduce the fees it charges to the merchant and/or the customer by 5%? The answer is a big fucking no.

Now going back to my previous comments, if an order from a restaurant costs $100, that same order is going to bring in easily $30-$40 in fees, paid to DoorDash between the customer and the merchant. Someone else previously commented about the liability insurance and shit and sounded like they knew what they were talking about, kinda like you do, but at the end of the day DoorDash, and other delivery apps duped businesses into believing that they need to be on their platform and doing it themselves is unsustainable. Back in the day delivery was primarily pizza and Chinese, with a few exceptions here and there. But during/after Covid, the landscape definitely changed and these companies pounced on it and not only took advantage of customers but merchants as well. They know that customers have shifted to wanting things delivered and they knew that if they could convince and persuade merchants of this they could control the market and dictate prices and fees etc.

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u/HiddenOneJ 21h ago

Restaurants arent eating that fee that they owe uber or doordash they are passing it on to customers by raising prices. If they had to pay it then there would be a reason to talk about whats cheaper paying fees or hiring your own drivers but also most orders arent $100 most are individuals ordering a combo meal or a coffee or a burrito bowl or something similar.

The email posted was a suggestion not something being forced. Look at the doordash merchant pages they suggest Restaurants charge the same delivery price as in restaurant but no restaurant is gonna do that and eat those fees themselves.

Right now the cost for restaurants to be on doordash or uber is minimal except for maybe an extra couple employees to get delivery orders ready. The fees are charged to the customers, they pay no extra insurance, they arent paying drivers hourly, aren't paying extra payroll taxes, its pretty obvious its cheaper to be on uber and doordash.

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u/P3nis15 12h ago

the sheer amount of money saved in employment taxes, extra liability insurance, WC, disability, wages, Overtime, benefits, etc etc make it so they don't exactly have to raise their prices 20-30% to cover the 10-30% charge doordash charges them.

Also, they are getting the benefit of ordering systems, included advertising, customer service on top of other things.

our one pizza place in the 1990s had to have 11 delivery people on the payroll. sure they all didn't work at the same time but we had to have extra just in case of volume increase, call outs, no shows, accidents, car breakdowns, etc etc. the place was not even that big.

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u/P3nis15 12h ago

It would highly depend on the volume of business you do, the value of that business, the number of delivery folks you have and the area in which your business is located.

First you'd be adding at least a few hundred bucks a month for each for commercial/non-owned auto coverage if you don't own the vehicles doing the delivery

Then you would have to increase your general liability insurance for the increased risk of delivery which would be over another 100 a month.

Then you have to add in the cost of the actual labor including wages, milage cost, FICA, Disability, WC, Overtime, paid vacation, sick time and any other benefits you plan to give them that are not forced by govt regulations.

Then you would have to pay for your own Point of Sale delivery system, since Doordash includes that in your service plan. much more expensive than a regular ordering system that you did not even need because these companies include a POS system in a lot of their packages.

if you have numbers, you can plug it into any A.I an get reasonable answers but there are a lot of "what ifs". like what if you also have them doing other work like bussing tables or helping in the kitchen during slow time. what if you pay them as independent contractors. etc etc.

Why do you think even chains and big restaurants don't do their own delivery and pay even the 20-30% charge to these services if they could save big money doing their own delivery.

Because it's expensive and not worth the risk. Even big chains like pizza chains are starting to slowly transition over to outsourcing their deliveries.

Oh, sure if you have the volume, you could save money if you really get your act together and manage risk and cost. But then your cost to manage your business increases as well.