- DoorDash is de-emphasizing restaurants that charge more for delivery than in-person.
- The app will also designate restaurants that keep prices the same, Restaurant Business reported.
- Restaurants have tried to make delivery more profitable, but delivery services have pushed back.
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DoorDash’s latest change takes aim at restaurants that charge more for food ordered through the delivery app than they do if you walk into their dining room.
The delivery service is ranking restaurants lower on its homepage if they add a premium to menu prices for delivery items, Restaurant Business first reported on Thursday, citing communications that DoorDash sent to restaurants that it works with. DoorDash is also adding a specification on its app when a restaurant’s prices are the same through DoorDash and in-person, according to Restaurant Business.
“Stores are much better off reducing prices than being subject to prioritization updates on the homepage,” a document seen by Restaurant Business read.
“Our mission is to empower local economies, while balancing and protecting the needs of each of the audiences we serve — consumers, merchants, and Dashers,” a spokesperson for DoorDash said. “We estimate that significant discrepancies in menu pricing can lead to up to 37% fewer sales and up to 78% lower reorder rates, resulting in increased negative reviews for restaurant partners and fewer earning opportunities for Dashers. We understand that there may be many reasons why restaurants choose to raise their prices, but in our mission to improve the customer and merchant experience, we encourage restaurants to set prices on DoorDash that more closely reflect in-store menu prices.”
Restaurants have often raised prices on orders made through DoorDash and other delivery services to reclaim some of what they pay in commissions to these apps. In some cases, those commissions are as high as 30%.
In response, DoorDash has cited customer dissatisfaction when restaurants charge more for delivery orders. The document seen by Restaurant Business cites one example where a customer complained to DoorDash about a hamburger that sold for $19.99 in-person but was $24.99 through DoorDash.
“Why do you let this merchant price gouge?” the customer asked, according to the report.
DoorDash has also told restaurants that charging more for delivery items leads to more negative reviews and fewer sales, including fewer reorders, Restaurant Business reported.
Restaurants, long businesses with low-profit margins, have found ways to make working with delivery services more lucrative. Some have started preparing food for digital-only delivery brands, including some owned by celebrities such as MrBeast, as a way to bring in extra money using their existing kitchen and staff.
Others have turned to less scrupulous means, such as listing the same menu items under several different restaurant brand names to boost sales — another practice that services like DoorDash, Uber Eats, and Grubhub have pushed back on.