Food delivery service hikes prices to cover minimum wage rise

DoorDash is planning to raise delivery fees for both New York City customers and restaurants in response to recent minimum wage increases for delivery workers.

Approximately one month after legislation mandated higher hourly minimum wages for food delivery workers, requiring them to earn at least $17.96 per hour, DoorDash has informed restaurants that they will face higher commission rates starting this Wednesday.

The news was delivered via a memo obtained by the New York Post.

Labour costs

The memo also includes a warning that customer fees will rise due to the “extreme minimum pay rate” to help offset the increased labour costs.

Eli Scheinholtz, a DoorDash spokesman, confirmed the company’s intention to introduce fees when the new minimum pay rate was implemented.

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However, he declined to specify the extent of the impending fee hikes, stating that higher consumer fees would be rolled out “in the coming weeks.”

According to the memo sent to restaurants, they can expect to pay a maximum commission rate of 23% for delivery orders and 8% for pickup orders.

This aligns with the maximum allowed under New York City’s fee cap legislation, which was hotly contested and implemented during the pandemic.