The Bizarre Speed Clause In McDonald's New DoorDash Contract
The most utilized food delivery app in the United States, according to CNBC, in April 2021 DoorDash was responsible for 45% of all food delivery orders, far surpassing competitors GrubHub and UberEats.
Given its popularity and its huge market shares, DoorDash is in a position to make, shall we say, interesting, contracts with its restaurant partners. And recently, news surfaced that the delivery company has done just that, with what has got to be one of the biggest fast food restaurants around: McDonald's. That partnership has been highly lucrative for the fast food giant, according to Nation's Restaurant News: after making food delivery available through both DoorDash and GrubHub in late 2019, McDonald's reported an increase of 2.3% same-store sales growth over that of 2018. So it makes sense that the chain would want to agree to the app's policies — no matter how odd.
DoorDash wants McDonald's orders faster
As reported by the Wall Street Journal, the new contract reached by food delivery platform DoorDash and fast food behemoth McDonald's contains an unexpected term, one that indicates that the app might think McDonald's is a little slow. The new contract states that, starting next year, DoorDash will charge higher commissions to McDonald's locations that keep a DoorDash driver waiting for the food that will then be delivered to a customer.
According to documents reviewed by the newspaper, a time clock will start running when a DoorDash delivery person is about 80 feet away from a McDonald's restaurant. Commission rates start to rise after just over four minutes, climbing higher with each additional minute that passes. Basically, the longer the driver waits, the more money the McDonald's location will owe DoorDash. The fact that McDonald's signed off on this deal shows just how important the app is to its sales.
It's worth noting that this new term could work in either company's favor: The starting commission for McDonald's DoorDash orders was lowered to as little as 11.6% from 15.5%, meaning speedy locations will be scoring a better deal than they once were.