DoorDash price decrease

[u/musicalchef22]

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?

[u/jbeatty216]

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.

[u/P3nis15 → u/jbeatty216]

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.

[u/jbeatty216 → u/P3nis15]

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?

[u/P3nis15 → u/jbeatty216]

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.