Why Is Doordash So Expensive? 8 Reasons of High Prices
Food delivery apps sound like a dream come true. You can order your favorite food from local restaurants and get it delivered to your home. You can order food right on your phone or laptop at any time of the day.
Whether it is breakfast, lunch or dinner time, you can get your order delivered 24/7. If you have a busy agenda, you can also schedule the delivery in advance for it to be delivered the next day.
However, when placing an order on the Doordash app, you may find yourself surprised by the high prices of your Doordash order.
Why are prices higher on Doordash?
Even small burgers and fries can fetch an expensive price.
Considering that some fast food chains are known to be extremely cheap, the price hike may confuse you.
But, what are some of the causes behind this rise in cost, and what can you, as the consumer, do about it?
Here are 5 reasons why Doordash is so expensive. We will also share with you some solutions to save money on your next order.
The Wall Street Journal, comparing identical orders from three Philadelphia restaurants using DoorDash, Grubhub, and Postmates in both 2019 and 2021 found higher prices and added fees have made delivery apps significantly pricier options today than they were pre-pandemic.
So, why is food delivery so expensive?
At BestReferralDriver we are a team of experts when it comes to ridesharing and delivery apps. There are a number of factors that are collectively contributing to the high costs of orders on Doordash.
When you order food using a delivery platform, you will not only pay the food costs but also the service of getting it delivered to your home.
You can easily justify your extra expense by putting value to your own time.
While someone else is waiting at the restaurant to pick up your order, you can stay at home and spend time with your kids or doing something else.
In addition to delivery and service fees, a premium subscription plan (called DashPass), and a white-label logistics service (called Drive), Doordash makes money by charging restaurants a percentage fee of every order.
One of the main reasons why Doordash prices are more expensive is the additional fee that some Doordash users are currently paying.
Some cities, including New York City, Chicago, and the state of California introduced a cap on fees and commissions that delivery platforms can charge to restaurants using third party delivery companies such as Doordash, Uber Eats and Grubhub.
This cap on fees forced Doordash to pass costs to the consumer. So, Doordash didn’t raise the prices but the fees they charge to customers. Instead of reverting to the restaurants, Doordash now turned to its customers.
A DoorDash spokesperson said: “Operating our platform, paying and insuring Dashers, and ensuring high-quality service can be expensive, which is why in many markets where local governments have passed pricing regulations, we have begun charging customers a small additional fee.”
Another reason why food delivery is so expensive is because prices are higher on the app than in-store.
Delivery apps have seen significant increases in popularity, with more customers opting to dine from home. Online ordering and delivery grew 300% faster than dine-in sales since 2014.
Doordash was born as a food delivery app but today expanded into other delivery services. Doordash facilitates alcohol delivery, grocery delivery, and even flower delivery.
So, why are menu item prices higher on Doordash?Probably you are thinking that Doordash raised their prices. At this point it is really important that you know how Doordash works. Doordash applies commission fees to restaurants and merchant partners.
Doordash does not increase food prices, the restaurants do. Merchants are free to set the price of menu items sold on the platform. They may raise the cost on the app, making it higher than in-store prices.
Often, prices are higher on the app because they are marked up to cover the fees Doordash, Grubhub and Uber Eats apply to their merchant partners.
Now that you figure out why doordash prices are higher than restaurants, you should consider another factor that makes food delivery expensive.
Minimum Order Quantity refers to the minimum amount that one can spend in order to order from a restaurant on the Doordash platform.
Defying a minimum order is beneficial in ensuring restaurants are making a healthy profit margin.
From a customer point of view, this means that if your order total does not reach the minimum order amount established by the restaurant, you have to spend more on the Doordash platform by ordering more items otherwise you will pay an additional small delivery fee.
Doordash drivers are not Doordash employees but independent contractors. Every time you place an order through the app, Doordash sends a delivery request to the closest delivery driver.
Have you ever heard about the DeclineNow movement?
Dashers are always looking for ways and strategies to earn more while Dashing.
Some drivers choose to maintain a perfect rating and simply accept every order, even the $2.5 orders, while others evaluate strictly and refuse orders based on different factors such as the pay, the size of the order, the distance to and from the restaurant and delivery location (number of miles).
Dashers are responsible for their car maintenance and gas expenses.
Every request they accept should satisfy a certain level of expenses.
Some delivery drivers found a way to game the system.
Tired of delivering for low fares, they have found how to manipulate the Doordash’s algorithms by pushing base pay for drivers up by collectively avoiding some orders.
If you decline a lowball offer from DoorDash, the algorithm will raise the base pay for the next driver. This will result in more high-paying offers for drivers who will make more money per mile and increasing delivery fees for customers.
DoorDash has seemingly acknowledged the reality that drivers try to get as much out of the app as they can and changed the delivery driver payment model so that the DoorDash drivers can earn more.
In basic economics, the price of goods or services is primarily determined by supply and demand.
When demand for a good is high, then the price increases.
When demand for a good is low, then the price decreases.
There are certain times of the day and days of the week in which the demand for deliveries is higher than usual.
So, why are delivery fees so high? DoorDash does raise fees during times of high demand. A tip to earn more money is to work during these busy times.
If the delivery driver provides an extra service, like being on time and keeping your food warm by using the insulated bag, you will probably add a tip on top of the delivery and service charge.
Tipping will increase the amount you have to pay. You can make the decision once you’ve received your order or before.
👀 Related Article: What If You Don't Tip Doordashers
If you are a rideshare user, you probably already saw the costs of Uber rides and the cost of Lyft rides have exploded across the country. Indeed, many drivers left rideshare platforms early in the midst of the pandemic due to concerns about the risk of contracting COVID-19.
Doordash doesn’t pay for gas and due to the rise of gas prices, some DoorDash workers have stopped providing deliveries because they are making less money than before as they have to pay more on gas.
As of today, Dashers can save money on gas through their DasherDirect cards . However, in some states such as California where gas prices are especially high, this is often not enough.
Find below some useful tips to save money on food delivery.
This is one of the best pieces of advice we can share with you and one that is really easy to do.
By comparing online prices and fees on different delivery apps, consumers can make a smart choice when it comes to where they should order food online from.
These days you can make a few clicks online and a purchase ends up at your doorstep. With just a couple more clicks, you can easily save money by signing up for the DashPass subscription .
If you're placing more than one order per week, the money you'll spend on delivery fees will quickly add up and surpass the monthly membership fee of $9.99. The membership can prove useful to those who actively order from Doordash.
Doordash offers customers hundreds of promo codes and discounts online.
Customers can easily take advantage of them and apply promo codes to their virtual cart at the check out. We suggest you enable email notifications so you will not miss any offer. To be updated about Doordash promotions, you can also follow official Doordash accounts on social media such as Facebook, Twitter and Instagram. Moreover, if you are looking for convenient tools to save money on your online shopping, you can use browser extensions and money-saving apps.
Service fees are essentially what help the San Francisco headquartered company to turn a profit. They're basically fees that get added onto the base price of every delivery order.
Now you know why Doordash prices increased recently due to additional fees. You also know why Doordash prices are higher than at restaurants.
You can follow our tips to save some money on online food orders. If you want even more savings, skip the delivery option and choose the pick-up option instead. This way you’re avoiding the crowded restaurants and the hefty fees.
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