How much would it cost to have food delivered to your home from the restaurant of your choice?

Due to the increasing popularity of delivery apps such as Grubhub, DoorDash, and Uber Eats in daily eating, third-party meal delivery is becoming the standard for American customers. Additionally, it presents a growingly complex equation including service charges, delivery expenses, and employee gratuities to patrons and dining establishments.

The services, which have attempted to maintain (or increase) earnings and support orders as Americans in financial hardship closely examine the checkout screen and order totals that frequently exceed their expectations, have been beset by frustrations on all sides of the debate.

Customers reported larger yearly growth in their total checks on third-party applications between 2022 and 2024 compared to orders placed directly through restaurant websites, according to Technomic. 

According to the food service industry research organisation, customers still claim to spend more on average for orders placed through third parties, even though Uber Eats, DoorDash, and Grubhub all advertise premium memberships as a way to save costs.

A period of chronic inflation has caused more Americans to be frugal with their money, which has led to higher expenditures.

Zainab Batool, a resident of San Francisco, described the additional costs as “insane.” She claimed to order delivery from DoorDash or Uber Eats once a week.

“It seems like they keep going up, but I feel like I remember a time when they used to not be as high, maybe four years ago,” Batool said.

Technomic’s 2024 Delivery & Takeaway Consumer Trend Report indicates that a growing percentage of consumers—from 15% in 2020 to 21% in 2024—are opting for third-party delivery services over direct restaurant delivery. The research agency discovered that the features that have kept app users returning include better order monitoring, access to discounts and promotions, and the capacity to find new eateries.

However, the price of additional charges could be turning some of them away.

According to the survey, 41% of customers who report ordering fewer deliveries blame excessive delivery costs, while 48% blame higher menu pricing.

According to a report by Gordon Haskett Research Advisors, the premium that restaurants were asking for menus from third-party delivery services grew between 2022 and 2023 and has nearly quadrupled since 2020.

The delivery-facilitating companies say that although they’re working to stay in business, they want to keep rates as low as possible.

In a statement, Grubhub stated that it wants to retain its company while charging as little as possible in costs. A Grubhub representative stated, “We’ve adjusted our fees accordingly as the costs associated with handling deliveries — including managing logistics and paying delivery partners — have risen.”

Just Eat Takeaway, an Amsterdam-based online meal ordering and delivery service, owns the business and has stated that it is actively seeking to sell all or a portion of Grubhub.

In response to the past two years of unprecedented inflation, DoorDash claims to have reduced rates for customers. Last year also saw an all-time high in active users and a surge in order frequency.

After going public in 2020, the firm has not yet reported a profit for the year. The delivery service only made a profit of $23 million for the three months that ended on June 30, 2020, right at the start of the Covid lockdowns in the United States. Meanwhile, the massive ride-hailing company Uber made nearly $1.9 billion in revenue last year, largely due to significant growth in its delivery business.

Uber’s delivery division, which consists of Uber Direct and Uber Eats, reported adjusted EBITDA of $1.51 billion for 2023, a $955 million increase over 2022.

According to an Uber representative, customers of Uber Eats pay for a service that lets them browse retailers and place orders quickly with on-demand delivery.

According to a statement from the representative, “the fees for orders on Uber Eats help pay delivery people and cover platform costs — like safety programs, 24/7 support, background checks, product development, and more — so that orders can arrive reliably.”

Completing the maths across platforms is becoming more difficult for diners.

According to their respective websites, order totals on Uber and DoorDash may differ depending on the location due to additional costs that are imposed to compensate for local rules and regulations. For instance, in California, users of Uber Eats are required to pay a CA Driver Benefits charge, which was implemented in order to finance necessary benefits for drivers after Prop 22, according to Uber.

The add-ons can be intimidating even without local variations.

According to its website, Uber charges a delivery cost that fluctuates based on demand, geography, and driver availability. A comparable delivery charge is charged by DoorDash, which claims that it depends on a number of variables. According to both applications, this money is not paid to the drivers or restaurants, but rather to them directly to pay delivery costs. In addition, Grubhub charges a delivery fee on orders that goes up in price as the distance grows.

Additionally, each of the three applications has a different service price, which is as difficult to figure out.

While Uber claims that all but 10 cents of its service price goes directly to the delivery driver, Grubhub and DoorDash claim that the money pays for the costs of running their platforms. However, Uber expects the driver to pay an undisclosed sum for additional support services.

According to DoorDash and Uber, the cost may vary depending on the order subtotal.

Many consumers won’t know the entire cost of their order until they’ve chosen their products and completed the checkout process, even after accounting for all of those variances and potential discounts or specials.

“You see something listed as 15 bucks and then you go to checkout and it adds up to, like, 25, but you’ve already kind of in your head committed to getting that thing or you’re looking forward to it,” app user Batool said. “It adds an extra friction between backing out of ordering.”

Both Uber and Grubhub said their fees are clearly disclosed before checkout, while DoorDash said the total applicable fees are consistently available to view in the cart.

(Adapted from BBC.com)