Benzinga | Apr 27, 2021 10:28AM EDT

DoorDash Announces New Pricing Structure For Restaurants

* DoorDash Inc (NYSE: DASH) has introduced three new tiers of commission for the restaurants for different service levels based on profitability or growth requirement, the Financial Times reports.

* U.S. legislators levied temporary caps on the fees last year to help the ailing restaurant industry retain a larger chunk of their profits during the pandemic, Bloomberg reports

* DoorDash's basic plan charged a 15% commission and included delivery and pickup services. This plan shifted a higher portion of the delivery cost to the customer and reduced the delivery area for profitability.

* The next plus tier commission of 25% included an extended delivery area and access to customers on DashPass, a subscription-based loyalty program offering reduced service fees from participating restaurants. Restaurants projected growth from higher order volume.

* The premier plan charged a 30% commission for the lowest customer fees and the largest delivery area along with DashPass benefits. It focuses on customer acquisition and order volume growth.

* DoorDash refunded restaurant commissions for less than twenty pickup and delivery orders. Pickup order commission was reduced from 15% to 6%. The company has eliminated the fees for setup, software, and merchant delivery for its online ordering product, Storefront.

* DoorDash had reported a loss of $312 million on revenue of $970 million in Q4FY20.

* DoorDash expects more restaurants to avail the 30% tier with the widest delivery radius, additional marketing, and app visibility.

* The new pricing structure has been tested over the last six months and is expected to have an insignificant impact on the company's profitability and Dasher earnings.

* DoorDash will appoint a Chief Restaurant Adviser to work as a liaison between DoorDash and restaurants.

* Price action: DASH shares traded higher by 2.92% at $158.29 on the last check Tuesday.