Delivery company DoorDash is abandoning a plan to charge restaurants participating in its premium DashPass program a higher commission fee. The move would have sidestepped a cap on what delivery apps can charge D.C. restaurants during the public health emergency.
“We recognize that there has been confusion as a result of our response to the unintended consequences of the pricing regulations in Washington, D.C.,” a DoorDash spokesperson told DCist in an email on Wednesday. “We look forward to engaging with local policymakers to increase understanding of the impact pricing regulations have, and solutions that better serve customers, Dashers, and restaurants.”
D.C. Attorney General Karl Racine’s office confirmed to DCist that it sent a cease and desist letter to the company this week, noting that DoorDash would be violating emergency legislation that took effect in May, which capped delivery fees at 15%. Delivery companies like DoorDash, UberEats, and others, typically charge closer to 30%.
DashPass is a subscription service that costs $9.99 a month for customers, who get unlimited deliveries and lower service fees on orders over $12. Last week, DoorDash informed several local restaurants that due to the cap, the rates they had been paying to participate in DashPass were lower than their original contracted rates, and would soon increase, according to Washington City Paper.
“The regulation is only applicable to Classic orders and does not apply to the DashPass program, which is an optional, premium offering and separate from DoorDash’s core services … Effective Wednesday, December 9th, we will begin charging DashPass orders at the contractual rate in your original agreement with DoorDash.”
One restaurant owner told the publication that their fees would go from 15% to 30% as a result of the change. City Paper reported that neither Ward 3 Councilmember Mary Cheh, who helped draft the legislation, nor Racine’s office found a loophole regarding premium services that would allow for such a change.
The news comes just weeks after Racine announced last month that his office had reached a settlement with DoorDash over claims it misled D.C. consumers and pocketed workers’ tips, requiring it to pay $2.5 million.
The company continued to deny the allegations, telling DCist in an emailed statement at the time, “We’re pleased to have this issue behind us, and thank the Office of the Attorney General for D.C. for its work throughout this process. Our focus is on continuing to support Dashers, restaurants, and customers in DC and around the country,” it said in an email to DCist.”
