Domino’s is giving away $50 million of free food to take on DoorDash

A customer leaves Domino's Pizza with 3 pies, Wednesday, Feb. 21, 2007, in Sandy, Utah. Domino's Pizza Inc. said Frida, Feb. 23, 2007 fourth-quarter profit fell 23 percent from year-ago results that included a gain on the sale of an investment in a franchise operation in Mexico. (AP Photo/Douglas C. Pizac)

  (CNN) — Domino’s Pizza is taking on delivery apps that charge extra fees with a new giveaway totaling $50 million worth of free food.

The pizza chain announced Monday a “Surprise Frees” promotion, giving customers a chance for some free food to counter delivery apps like UberEats and DoorDash. Domino’s called competitors’ extra fees a “disappointing surprise.”

“Other food delivery apps charge customers with hidden city or service fees,” Domino’s said on its website. “Not Domino’s. We charge customers one straightforward delivery fee because we believe that level of transparency is what customers want and deserve.”

Lucky Domino’s customers who order on the company’s website now through November 21 could get an added menu item at no additional cost, including pizza, cheesy bread or chocolate lava cakes. Domino’s said the free food will be added to one in every 14 orders, giving customers a little more than a 7% chance of winning each time they order. Winners will see the additional menu item on their order confirmation page.

UberEats, DoorDash and other food delivery apps have angered some customers for adding fees in some US cities just before checkout. The added charges are the result of local governments pausing caps that limit how much third-party delivery platforms can charge restaurants in an effort to help struggling businesses.

DoorDash has added a roughly $1 to $2 delivery charge in several US cities, including Chicago, Cleveland and Denver. UberEats has charged a similar customer fee in Portland, Chicago, Minneapolis and Boston.

In the United States, Domino’s has long resisted offering deliveries through third-party apps. In a February earnings call, Domino’s CEO Richard Allison said the company “struggled a little bit understanding the long-term economics in some of the aggregator businesses,” and that it “doesn’t make sense economically” for franchisees to use the apps.

“In 60 years, we’ve never made a dollar delivering a pizza. We make money on the product, but we don’t make money on the delivery,” Allison said on the call. “So, we’re just not sure how others do it.”

The free food offer may also offset some concerns from Domino’s customers who are now waiting longer for their deliveries. Allison recently said that delivery times have “slipped a minute or two” because of staffing challenges. To help address the issue, Domino’s is raising wages, a tactic that has helped some restaurant chains attract employees.


Pixel Image