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Trouble in Delivery Land

09/07/2023

Recent press reports have indicated conflicts between restaurants and delivery services over prices charged to consumers.  Companies including DoorDash and Uber Eats place a charge of 15 to 30 percent on an order to cover operating and delivery costs.  Restaurants are adding surcharges to these amounts, creating expensive differentials between in-restaurant and home-delivered meals and beverages.

 

Since consumers in a post-COVID era are more conservative in their approach to the cost of home-delivered meals, restaurants and consumers are questioning fees, add-ons and tips.

 

To counter price gouging, delivery services are delisting some restaurants and adapting apps to discriminate against overcharging and are also highlighting exorbitant restaurant markups. In response some restaurants have delisted from delivery services and are offering their own home delivery. E-ordering with pickup may result in a price more acceptable to both restaurants and price-sensitive consumers.

 

The tug of war between restaurants and delivery services will continue and, in all probability, will be reflected in the upcoming financial reports of the major providers.

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