Report: DoorDash Will Increase Fees for McDonald's Locations That Are Slow and Mess Up Orders The new terms were reported early this week.

By Emily Rella

entrepreneur daily

NurPhoto | Getty Images

The benefit of using a food delivery service when you're starving is that you don't physically have to go anywhere to pick up the food yourself, saving you time in exchange for a little extra money.

Though apps and delivery services offer an estimated delivery time when customers place orders, slowdowns at restaurants and other circumstances can lead to longer wait times, resulting in stressed-out drivers and disgruntled customers.

Food delivery service DoorDash is hitting back against slowdowns — and they're aiming straight at fast-food titan McDonald's.

According to a new report, DoorDash will start charging McDonald's locations that are slow to prepare orders and take a higher commission from those locations if drivers are often waiting on orders.

Related: Viral Video Shows Workers Not Taking Deliveries Without Tips, Sparks Debate: 'We Can Pick and Choose'

McDonald's outposts that frequently make mistakes with customers' orders will not be reimbursed for the cost of the refunds.

DoorDash takes an estimated 15.5-11.6% commission from reliable restaurants, while rates for slower restaurants will range from 17.6-20.1%, per the Wall Street Journal.

"Commission rates are just one component we consider when establishing these strategic agreements, which often take into account unique and reciprocal business objectives and allow our partners to capitalize on the unmatched advantages that a global partnership with the largest restaurant company in the world provides," a McDonald's spokesperson told Insider.

The fast-food chain announced a new partnership with DoorDash and Uber Eats last November in order to "provide better terms to the company's franchisees," though the specific terms were not publicly disclosed. It's estimated that around 93% of McDonald's locations are owned by franchisees.

McDonald's originally signed an exclusive deal with Uber Eats back in 2017.

DoorDash completed 816 million orders in 2020 and brought in $2.89 billion in revenue, with another 329 million orders being completed in Q1 of 2021, per reports.

DoorDash was down 53.25% year over year as of Tuesday afternoon, most likely due to a decreased need for in-home dining and delivery as pandemic restrictions continue to loosen.

Emily Rella

Entrepreneur Staff

Senior News Writer

Emily Rella is a Senior News Writer at Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Business News

A Former Disney Star Just Launched a Space Startup With $6.3 Million in Seed Funding. Here's Why She Did It.

Bridgit Mendler co-founded Northwood Space to bring data from space reliably down to Earth.

Growing a Business

Expand Your Knowledge and Unlock Success With These Must-Read Business Books

Top business books to ignite your entrepreneurial journey.

Business Ideas

55 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.


10 Expert Insights for the Optimal (and Most Effective) PR Budget in 2024

The age-old question "How much should a company spend on PR?" echoes through boardrooms, with organizations seeking a magic formula for budget allocation. Here are 10 things you need to consider.


Incorporating This Simple Activity Into Your Daily Routine Can Boost Your Productivity, Creativity and Business

This simple yet profound activity has transformed not just my health, but the way I do business. Here's how.