DoorDash takes a hefty cut from restaurants, and risks losing them to cheaper options
Ari Levy, 08 December 2020
Salvatore Reina owns three Francesca pizzerias in New Jersey that have been closed for indoor dining during the pandemic. While much of his industry turned to DoorDash, Reina resisted.
“Third parties take a big cut,” said Reina, who opened his first pizzeria 12 years ago, about 20 miles outside of New York City. “I’d rather spend those marketing dollars to get people directly.”
As DoorDash prepares for its public market debut, an offering that could value the delivery app service at over $30 billion, the San Francisco-based company has to show that it can make enough money on every order to turn into a profitable business. Meanwhile, investors have to consider how many restaurant owners will eventually turn away from apps like DoorDash because the costs are too high for their low-margin operations.
