DoorDash will be reducing commission fees by 50 percent for orders placed on DoorDash and DoorDash-owned Caviar for all of its local restaurant partners, the company announced on Thursday. The commission relief program will begin on Monday, April 13th and run through the end of May.
The program will benefit more than 150,000 local restaurants in Australia, Canada, and the US, DoorDash says. DoorDash defines a local restaurant as one with five or fewer locations.
DoorDash CEO Tony Xu said this is an “injection of up to $100 million,” but it appears the company isn’t actually giving anyone money directly, as that dollar amount seemingly represents the accumulated total of reduced commissions.
Here’s an example to help demonstrate what that means. If a local restaurant previously paid a $2.50 commission to DoorDash on an order, it would now pay $1.25 because of the reduced commission rate announced today. The $1.25 that the restaurant didn’t pay because of the reduced commission rate would count toward that $100 million figure. However, even if the total value of reduced commissions exceeds $100 million before the end of May, the reduced commissions program would continue, DoorDash confirmed to The Verge.
Local businesses are the fabric of our communities. To further help them, we’re reducing commissions for local restaurant partners by 50% through the end of May. This injection of up to $100m is on top of our prior initiatives. Read more here: https://t.co/CdIQRinse8
— Tony Xu (@t_xu) April 9, 2020
This isn’t the first program DoorDash has launched to ease the financial burden on its restaurant partners during the COVID-19 pandemic. The company announced on March 17th that DoorDash and Caviar partners wouldn’t have to pay commission fees on pickup orders. The company also said that independent restaurants in Australia, Canada, Puerto Rico, and the US could sign up for DoorDash and Caviar for free and pay no commissions for 30 days.
DoorDash is also working to provide assistance to its delivery couriers by offering up to two weeks of sick pay if they are diagnosed with COVID-19 or if they have to quarantine themselves “at the direction of public health officials,” the company told The Verge on March 10th. DoorDash has also given out hand sanitizer, gloves, and wipes to its couriers and said on April 3rd that it had ordered more than two million “consumer-grade face masks” to distribute to couriers.