How DoorDash Works: Restaurant Partners, Dashers & Customer Economics

Introduction: DoorDash's Three-Sided Marketplace

DoorDash has become North America's largest food delivery platform with a 67% market share and $66 billion in annual GMV. But how exactly does this three-sided marketplace work? This comprehensive guide breaks down DoorDash's business model, commission structures, dasher economics, and customer fees.

The Three Sides of DoorDash's Marketplace

1. Restaurants (Supply Side)

Restaurants partner with DoorDash to expand their reach beyond dine-in customers. They gain access to DoorDash's 32+ million customers while DoorDash handles delivery logistics.

2. Dashers (Service Providers)

Independent contractors who pick up orders from restaurants and deliver them to customers. Currently 2+ million active dashers in the US, Canada, and Australia.

3. Customers (Demand Side)

Hungry customers order food through the DoorDash app or website. They can choose from 500,000+ restaurant partners and receive delivery in 30-45 minutes on average.

How the DoorDash Platform Works: Step-by-Step

Step 1: Customer Places Order

• Customer browses restaurant menus in the DoorDash app
• Adds items to cart and proceeds to checkout
• Sees estimated delivery time (typically 30-45 minutes)
• Reviews delivery fee, service fee, and tip
• Completes payment through DoorDash

Step 2: Restaurant Receives Order

• Order appears on restaurant's DoorDash tablet
• Restaurant confirms and begins preparing food
• Estimated prep time communicated to DoorDash algorithm
• Restaurant can reject orders if too busy or out of items

Step 3: DoorDash Assigns Dasher

• Algorithm identifies nearby available dashers
• Considers dasher rating, acceptance rate, and distance
• Sends delivery offer with payout and distance
• Dasher has 30-60 seconds to accept or decline
• If declined, offer goes to next dasher with increased pay

Step 4: Dasher Picks Up Order

• Dasher drives to restaurant
• Confirms pickup in app (triggers customer notification)
• Verifies order accuracy if possible
• Heads to customer location

Step 5: Delivery to Customer

• Customer tracks dasher in real-time via app
• Dasher follows GPS directions to address
• Completes contactless delivery or hands to customer
• Takes photo proof of delivery
• Marks order complete in app

Step 6: Post-Delivery

• Customer can rate dasher and leave review
• Customer can rate restaurant and food quality
• Dasher receives payment (base pay + tip)
• Restaurant receives payment (order subtotal - commission)

DoorDash Commission Structure for Restaurants

Three Partnership Plans

DoorDash Basic - 15% Commission

• Commission rate: 15% of order subtotal
• Delivery: Restaurant handles own delivery OR pays per-order fee
• Marketing: Limited visibility in app
• Best for: Restaurants with existing delivery infrastructure

DoorDash Plus - 25% Commission

• Commission rate: 25% of order subtotal
• Delivery: DoorDash provides delivery (no additional fee)
• Marketing: Standard visibility in app
• Customer fees: Lower fees attract more customers
• Best for: Most restaurants

DoorDash Premier - 30% Commission

• Commission rate: 30% of order subtotal
• Delivery: DoorDash provides delivery with priority
• Marketing: Premium placement and promotions
• Customer fees: Reduced fees for customers (DoorDash subsidizes)
• Benefits: Priority dasher assignment, featured placement
• Best for: High-volume restaurants wanting maximum growth

Additional Restaurant Fees

• Tablet fee: $6-10/month for DoorDash order tablet
• Marketing fees: Optional sponsored listing ads
• Packaging fees: DoorDash may charge for branded packaging
• Chargeback fees: $10-15 for customer disputes/refunds

Dasher Payment Structure

How Dashers Get Paid

Dasher earnings = Base Pay + Promotions + Tips (100% goes to dasher)

Base Pay ($2-10+ per delivery)

DoorDash's base pay varies based on:

• Distance: Longer trips = higher base pay
• Time: Expected time to complete delivery
• Desirability: Hard-to-fill orders get higher pay
• Typical range: $2-4 for short local deliveries
• Long distance: $8-10+ for 10+ mile deliveries

Promotions and Incentives

• Peak Pay: +$1-5 during busy times
• Challenges: Bonus for completing X deliveries in timeframe
• Guarantees: Earn minimum $ for completing X orders
• Example: "Complete 10 deliveries, earn $200 guaranteed"

Tips (100% to Dasher)

• Customers can tip before or after delivery
• Typical tips: 15-20% of order subtotal
• Dashers see tip amount before accepting order
• Higher tips = faster acceptance = faster delivery

Average Dasher Earnings

Customer Fees Explained

Fee Structure for Customers

1. Order Subtotal

Cost of food items before any fees. Restaurants may set higher menu prices on DoorDash vs in-store (10-30% markup common).

2. Delivery Fee ($1.99-$7.99+)

• Varies based on distance from restaurant
• Varies by restaurant partnership tier
• Higher during busy times (surge pricing)
• $0 for DashPass members (if order over $12)

3. Service Fee (10-15% of subtotal)

• DoorDash platform fee
• Typically 10-15% of order subtotal
• Capped at $5-8 on large orders
• Reduced for DashPass members

4. Small Order Fee ($2-4)

• Applied to orders under $10-12
• Encourages larger basket sizes
• Helps cover delivery costs on small orders

5. Taxes

• Sales tax on food items
• May include taxes on fees depending on jurisdiction

6. Tip (Recommended 15-20%)

• Goes 100% to dasher
• Can adjust after delivery if needed
• Higher tips get faster service

Example: Total Cost for Customer

DashPass Subscription Program

DashPass Benefits

• Cost: $9.99/month
• $0 delivery fees on eligible orders over $12
• Reduced service fees (typically 5% lower)
• Exclusive offers and promotions
• Access to DashMart (DoorDash's convenience stores)

Break-Even Analysis

DashPass pays for itself if you order 2-3+ times per month. Average savings per order: $4-8.

How DoorDash Makes Money

Revenue Streams

1. Restaurant Commissions (60% of revenue)

• 15-30% of every order subtotal
• Primary revenue source
• Volume-based business model

2. Customer Fees (30% of revenue)

• Delivery fees: $2-8 per order
• Service fees: 10-15% of subtotal
• Small order fees: $2-4

3. Advertising (8% of revenue)

• Promoted listings for restaurants
• Sponsored placements in search results
• CPG brand advertising in DashMart

4. DashPass Subscriptions (2% of revenue)

• $9.99/month × 12+ million members
• Drives order frequency and customer retention
• Growing segment with high margins

Profitability Economics

DoorDash Algorithm: How Orders Are Assigned

Dasher Assignment Factors

• Proximity: Closest dashers get priority
• Acceptance rate: Dashers with higher acceptance rates favored
• Customer rating: Higher-rated dashers get better orders
• Order value: Higher tips = better visibility to dashers
• Completion rate: Must maintain 80%+ to remain active

Order Stacking

DoorDash often assigns multiple orders to one dasher to improve efficiency:

• Orders from same restaurant to nearby customers
• Orders from nearby restaurants on same route
• Can increase dasher earnings but may delay delivery
• Customers don't know if their order is stacked

DoorDash vs Competitors

Market Share (US, 2025)

• DoorDash: 67%
• Uber Eats: 24%
• Grubhub: 7%
• Others: 2%

Why DoorDash Leads

• Largest restaurant selection: 500,000+ restaurants
• Best suburban coverage: Dominates outside major cities
• Most dashers: 2+ million active dashers = faster delivery
• DashPass value: Better subscription benefits than competitors
• Technology: Superior routing and assignment algorithm

Challenges and Criticisms

For Restaurants

• High commissions: 15-30% erodes already thin margins
• Lost customer relationships: DoorDash owns customer data
• Quality control: Food arrives cold, dasher issues blamed on restaurant
• Menu pricing: Forced to raise prices to cover commissions

For Dashers

• No benefits: Independent contractors = no health insurance, PTO
• Vehicle costs: Gas, maintenance, insurance not reimbursed
• Inconsistent earnings: Varies by market and time
• Deactivation risk: Can lose access with little recourse

For Customers

• High markups: Total cost 40-60% higher than pickup
• Quality issues: Cold food, wrong orders, missing items
• Hidden fees: Total cost higher than initial appearance
• Tipping pressure: Must tip well to ensure timely delivery

Future of DoorDash

Expansion Beyond Food

• DashMart: Convenience stores and grocery delivery
• Alcohol: Beer, wine, spirits in 3,000+ cities
• Retail: Pet supplies, flowers, office supplies
• Grocery: Partnership with Albertsons, other chains

Technology Innovations

• Autonomous delivery: Testing robots and drones
• Ghost kitchens: DoorDash operating own kitchens
• Predictive ordering: AI suggests orders before you search
• Better routing: More efficient multi-order delivery

Track DoorDash Data with PLOTT DATA

Monitor DoorDash marketplace intelligence with PLOTT DATA's comprehensive platform:

• Restaurant pricing: Track menu prices across 100,000+ restaurants
• Delivery fees: Monitor fee structures by market and time
• Menu changes: Track new items, promotions, and removals
• Competitive analysis: Compare your restaurant vs competitors
• Market trends: Identify growing cuisines and categories
• Search rankings: Monitor restaurant visibility and placement