Evercore ISI senior managing director Mark Mahaney analyzes DoorDash, Lyft, and Airbnb on Varney & Co.
DoorDash introduced this week that it is going to be elevating its service charges on all deliveries in Seattle, which they are saying already takes the cake for the most costly metropolis to order meals in.
The corporate didn’t specify how a lot they might be elevating the charges by, however they blamed the rise on the town’s laws round app-based employee pay and deactivations. DoorDash claims a legislation, which takes impact on July 31, 2025, would require extra time and assets to overview Dasher account deactivation. The elevated service charges will take impact later this month, a blow to prospects already grappling with excessive supply prices.
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The legislation will take impact on July 31, 2025. (Bloomberg/Getty Photographs / Getty Photographs)
“Seattle law already requires platforms to pay delivery workers nearly $30 an hour before mileage and tips–well above the city’s minimum wage. Now, the city is imposing additional costly regulations, including a drawn-out and intensive review of any Dasher deactivations,” the corporate wrote in a press release on its web site. “Despite frequent warnings to the City Council about the costs of these regulations, the combination of Seattle’s strict pay laws and new regulations governing DoorDash’s deactivations policies have put us in a position where we must increase fees yet again.”
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DoorDash app brand is displayed on a cell phone display screen photographed for illustration on a plate and with cutlery. Krakow, Poland, on February 9, 2021. (Photograph illustration by Beata Zawrzel/NurPhoto by way of Getty Photographs / Getty Photographs)
This is not the primary time DoorDash has hiked costs in response to the town’s laws. The corporate slapped a flat $5 service payment on all orders after Seattle Metropolis Council unanimously handed a legislation in 2022 guaranteeing a minimal wage for app-based staff. DoorDash argues Dashers have seen fewer deliveries and longer wait occasions to select up orders on account of the legislation, which ends up in decreased earnings.
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“A year after Seattle’s delivery pay law went into effect, Dashers were receiving half as many daily delivery offers as they were before and waiting three times longer for potential deliveries. This resulted in average hourly Dasher earnings for all time spent on the app in Seattle decreasing by over 20% between the end of 2023 and the end of 2024– a downward trend that has continued into 2025.” the corporate wrote.
A supply individual for DoorDash rides his bike within the rain throughout the coronavirus illness (COVID-19) pandemic within the Manhattan borough of New York Metropolis, New York, U.S., November 13, 2020. (REUTERS/Carlo Allegri / Reuters Images)
DoorDash says that its drivers aren’t the one ones seeing decreased earnings – the corporate reported that it operated at a loss in Seattle in 2024, regardless of bringing in $10.7 billion {dollars} nationwide. Its report additionally identified that native companies noticed a 2% drop in income, whereas companies in Denver, Portland, and San Francisco noticed a ten% improve – noting that orders in these cities have decrease service charges.
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