'DoorDash To Hike NYC Delivery Fees To Offset Minimum Wage Increase' - NY Post
Portfolio Pulse from Benzinga Newsdesk
DoorDash is increasing delivery fees in New York City for both customers and restaurants due to a recent minimum wage increase for delivery workers to at least $17.96 per hour. The company informed restaurants of higher commission rates, with a maximum of 23% for delivery and 8% for pickup orders, up from 20% and 5% respectively. The fee cap legislation during the pandemic had set these limits. UberEats has added a $2 'New York Courier fee' and both DoorDash and UberEats have moved the tipping option to post-checkout. Grubhub, DoorDash, and UberEats are involved in ongoing litigation against NYC's fee cap rule. DoorDash now pays delivery workers $29.93 per hour or 50 cents per active minute.
January 17, 2024 | 7:57 pm
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NEUTRAL IMPACT
DoorDash is raising delivery and pickup commission rates in NYC following a minimum wage increase for delivery workers. This could lead to higher costs for consumers and restaurants, potentially affecting DoorDash's revenue and customer satisfaction.
While the fee increase is intended to offset higher labor costs, it could lead to reduced order volumes if customers and restaurants decide to seek alternatives due to higher costs. This makes the short-term impact on DoorDash's stock price uncertain, as the potential increase in revenue per order may be offset by a decrease in order volume.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 90
NEUTRAL IMPACT
Grubhub, along with DoorDash and UberEats, is involved in ongoing litigation against NYC's fee cap rule and has warned of raising fees since the minimum wage law for delivery workers was passed.
Grubhub's involvement in the litigation and potential fee increases could affect its cost structure and profitability. The short-term impact on the stock is uncertain as the outcome of the litigation and the market's reaction to fee increases are yet to be seen.
CONFIDENCE 75
IMPORTANCE 55
RELEVANCE 60
NEUTRAL IMPACT
UberEats, part of Uber Technologies, has implemented a $2 'New York Courier fee' in response to the minimum wage increase for delivery workers. The company is considering further changes that may negatively impact small restaurants.
The additional fee and potential future changes by UberEats could impact Uber's revenue and relationship with small restaurants. However, the effect on the stock price is uncertain as it depends on customer and restaurant reactions to the fee changes.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70