DoorDash (DASH) has raised the commission rates it charges restaurants and other merchant partners and plans to soon boost the delivery fees customers in New York City pay to offset the impact of a recent increase in the minimum wage paid to delivery workers, the company said in an email statement this week to MT Newswires.
The pay floor for delivery workers rose to $17.96 per hour last month after a measure approved last summel. In response, DoorDash said the commission rate for delivery orders rose Wednesday to 23% and to 8% for pickup orders, up from 20% and 5%, respectively — the maximum amounts allowed under the city’s pandemic-era delivery rules.
DoorDash and rivals Uber (UBER) and Grubhub, the US subsidiary of Dutch tech company Just Eat Takeaway.com, all fought the minimum-wage increase while it was before the New York City Council and later in unsuccessful court fights. DoorDash, for example, said the higher minimum wage was unnecessary, contending its delivery people now receive at least $29.93 per hour, “or almost double NYC’s $15 minimum wage for other workers,” according to the company’s website.
“These new regulations will force us to raise fees for orders in New York City,” DoorDash told MT Newswires late Wednesday, adding that only the rates it charges merchants increased this week. Higher customer fees will be implemented “in coming weeks,” it said, without specifying an exact timeframe. The increases were first reported by The New York Post.
Some of DoorDash rivals said they were similarly grappling with the new pay floor for delivery workers. A GrubHub spokesman said the company was taking “appropriate steps” to comply with the minimum-wage increase “while still operating a sustainable business, given the added costs to now operate in the market.”
Friday’s statement from Grubhub did not specifically say whether it plans to change its delivery fees although the company spokesman said it is committed to keeping its fees affordable while also accounting for all of its costs. Uber did not respond to a request for comment from MT Newswires.