A little more than two weeks ago, the Chicago City Council took a bite at third-party delivery-service fees, imposing a 15% cap on fees that sometimes reached 30% previously.
Tuesday, one third-party delivery service nipped back.
As was first reported in Bloomberg, DoorDash announced the imposition of a “Chicago fee,” a $1.50 charge added to all orders placed at city restaurants.
The new fee is charged to customers, not restaurants, so is not affected by the Chicago ordinance.
Customers ordering through DoorDash saw a $1.50 “Chicago fee” added to their orders. By clicking on that fee, the following explanation appeared:
“Chicago has temporarily capped the fees that we may charge local restaurants. To continue to offer you convenient delivery while ensuring that Dashers are active and earning, you will now see a charge added to Chicago orders.”
Ald. Scott Waguespack (32nd), for one, isn’t amused.
“The incentive behind the ordinance was to stop price gouging,” he said. “We knew, depending on the company, that they were creating their own pattern of charging restaurants. When we put in the overall 15% cap (which includes delivery and marketing fees), we tried to make it fair across the board.”
The $1.50 fee represents a 15% charge on a $10 order, but is only 7.5% of a $20 order. The larger the order, the more insignificant the fee. $1.50 per order won’t make up the amount that DoorDash used to charge.
Waguespack said he suspects the fee is intended to make the company look better to potential investors; Wednesday is the day when DoorDash launches its IPO (initial public offering), hoping to raise close to $3 billion in new investments.
“This disgraceful fee is an outright attempt to pass this IPO of $3 billion,” he said. “Just pile on more fees and pass their IPO; that’s the only thing I can think of.”
Calling it a Chicago fee might also cause customers to think the charge is a city charge, Waguespack said.
“They might think it’s the city dinging them for an extra $1.50,” Waguespack said. “It doesn’t say ‘DoorDash fee,’ it says ‘Chicago fee.’ I think that’s their intention — to stick it to the city.
“It’s that kind of vulture capitalism mentality — we can do it, so we’re going to do it,” Waguespack said. “The billions of dollars (via the IPO, if successful) isn’t enough; they have to take this, too.”
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