DoorDash soared on its first day of trading on the New York Stock Exchange Wednesday (Dec. 9), surging over 85 percent from its initial public offering (IPO) price of $102 to close out the trading day at $189.51. The food delivery company trades under the ticker symbol of “DASH.”
Food delivery has been a green shoot during the coronavirus pandemic, as consumers limit their time outside of their residence as much as they can.
DoorDash said more than 390,000 businesses harness the app, according to a published report that cited the firm’s prospectus.
The company’s IPO commences a busy time for companies to hit the markets, with Airbnb scheduled to go public on Thursday (Dec. 10).
It also comes as the attorney general of the District of Columbia, Karl Racine, has reportedly written a letter ordering DoorDash to stop charging eateries a 30 percent commission on every order through the delivery firm’s DashPass subscription offering.
The letter that was reportedly send to the delivery firm said a 30 percent commission would go against the district’s code that puts a 15 percent cap on commissions for third-party delivery firms.
“While DashPass is a premium marketing offering and provides benefits to many restaurants, we have decided to not charge DC restaurants their contractual DashPass rate at this time. 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,” a representative for DoorDash said in a statement, per Reuters.
Commission rates of 30 percent may fall by the wayside where states and cities have been restricting what DoorDash can charge on eateries.
DoorDash said in an S-1 filing, “Many of our competitors are well capitalized and offer discounted services, lower merchant commission rates and consumer fees, incentives for independent contractors who provide delivery services and consumer discounts and promotions, innovative platforms and offerings, and alternative pay models, which may be more attractive than those that we offer.”