DoorDash to hike NYC delivery fees to offset minimum wage increase — here’s how much it will set you back
DoorDash is raising delivery fees for Big Apple customers and restaurants alike in response to recent minimum wage hikes — driving already-stratospheric prices even higher, The Post has learned.
A month after city legislation forced food-delivery apps to pay higher hourly wages – at least $17.96 an hour – DoorDash told restaurants that they will be paying a higher commission rate effective Wednesday, according to a memo obtained by The Post.
The memo also warns because of the “extreme minimum pay rate” customer fees will go up “to help offset the increased costs.”
The result: A typical dinner that’s delivered in New York City — whether it’s a burger, a chicken burrito or a plain cheese pizza — is likely to get $4 pricier, on average, according to food-industry insiders who asked not to be named.
That’s because insiders estimate Doordash will tack on an extra fee of $2, while restaurants raise the prices on dishes by the same amount to offset their own soaring costs.
“We have made clear from the start that we planned to introduce fees when the new minimum pay rate was first introduced,” DoorDash spokesman Eli Scheinholtz told The Post in an email.
Higher consumer fees will be introduced “in the coming weeks,” he added, declining to comment on the size of those fee increases.
DoorDash told restaurants in the memo they can expect to pay a maximum commission of 23% for delivery orders and 8% for pickup orders – or the maximum allowed under NYC’s hotly contested fee cap legislation implemented during the pandemic.
Previously, DoorDash was charging 20% and 5%, respectively, for delivery and pickup.
The delivery apps including UberEats and Grubhub also have warned since the minimum wage law was passed last summer that they plan to raise fees.
“All options are being considered, including changes that may negatively impact small restaurants, as we try and adapt to the city’s poorly thought out rule,” UberEats spokesman, Josh Gold told The Post.
Uber has already added a $2 “New York Courier fee” to orders and reminded customers that “tipping remains optional,” according to receipts, as it tries to mitigate any customer backlash.
Both DoorDash and UberEats moved the tipping option to after checkout in December.
Some restaurant owners said they had been expecting the delivery apps to hike their fees.
“I’m more concerned about the fee cap going away completely,” Andrew Schnipper, co-owner of burger joint Schnipper’s told The Post. “The fee cap has been enormously helpful to us over the past couple of years.”
Grubhub, DoorDash and UberEats sued New York City to in 2021 to overturn a rule that limits the fees they can charge restaurants to 23% of an order, which includes 15% for deliveries, 5% for marketing and 3% for credit card processing fees.
That litigation is ongoing.
DoorDash says it is now paying delivery workers $29.93 per hour or 50 cents per “active minute” as per the regulation.
The new law allows the apps to choose between paying $17.96 per hour or 50 cents per minute, which includes the time the delivery worker accepts a job to the drop-off as long as the latter equals $29.93 per hour.
