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Meals on food delivery apps can be 90% more than if bought from the restaurant

nytimes.com

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Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#41

Post by morrbo »

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

Don't forget the "service charge" (different to a tip, akin to Ticketmaster) I've started seeing on deliveroo in the UK

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#42

Post by mantap »

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

The business model is strong and is hugely successful in Asia. But the fees will decrease with competitive pressure.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#43

Post by braythwayt »

hamilyon2 wrote: post #29

I don't really understand what this article is about. There is a market opportunity. Companies see it and move into new market. More people's needs are fulfilled than before. Market economy works! Not news.

This is a site devoted to business as much as technology.

The details of HOW markets work are vital to understand for people doing business in a market. For example, understanding how the revenue is distributed amongst all the participants in a value chain is relevant and highly interesting.

Thus, the article, the upvotes, and the discussion.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#44

Post by ben509 »

AndrewDucker wrote: post #14

Well, yes. If you get someone to individually drive something cheap to your home then the cost of the delivery can be a large chunk of the final cost. I don't know why people would be surprised by that.

The author should have priced out a $50 order as well.

Most delivery only makes sense if you're buying a big meal, because the marginal cost of delivering a second pizza is almost zero.

Of course, this is also why tipping by percent is stupid system for delivery.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#45

Post by cthor »

hamilyon2 wrote: post #29

I don't really understand what this article is about. There is a market opportunity. Companies see it and move into new market. More people's needs are fulfilled than before. Market economy works! Not news.

Mostly yes. But a lot of these companies are operating at big losses funded by VC money.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#46

Post by braythwayt »

Anecdatum:

With skipthedishes in my town, all the big chains mark up their prices and send smaller portions than you get in the restaurant itself.

Whereas, the smaller independents seem to charge the same amount, but they blatantly try to get you to switch to ordering yourself by phone and picking up yourself. They advertise deep discounts when you call them directly.

It seems obvious that the smaller places want to use meal delivery as a sales tactic, but then convert as many customers as possible to a direct relationship.

The big chains, on the other hand, seem to have their own major sources of revenue and don’t appear to want any part of taking orders directly.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#47

Post by pcurve »

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

Compared to South Korea, the company's take is insane. SK's minimum wage is $7+ and it's not unusual for delivery person to make $3000+/month. Customers pay reasonable fee of a few dollars and no tip.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#48

Post by 9nGQluzmnq3M »

mantap wrote: post #42
SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

The business model is strong and is hugely successful in Asia. But the fees will decrease with competitive pressure.

That's because food is cheap, wages are low and cities are dense enough to cover by motorbike, PMD (hoverboards etc) or even bicycle.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#49

Post by rs23296008n1 »

braythwayt wrote: post #46

Anecdatum: With skipthedishes in my town, all the big chains mark up their prices and send smaller portions than you get in the restaurant itself. Whereas, the smaller independents seem to charge the same amount, but they blatantly try to get you to switch to ordering yourself by phone and picking up yourself. They advertise deep discounts when you call them directly. It seems obvious that the smaller places want to…

They're probably experimenting with their own apps as well as feeling out the market in terms of costing. Plus its "a bandwagon to jump on". They might jump off when they are ready however.

Another aspect is their scale. A small business can feel a delivery app taking out a few dollars. A bigger one might be using it as a cost that might only last a few years and seen as "research" to be recovered later.

Both can use these strategies however. The smaller businesses converting people to call direct might end up with their own apps and deliveries etc. A lot where I am are actively doing this. UberEats had them but I've noticed a few are setting up their own deliveries now. Others are keeping their options open.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#50

Post by joncrane »

wil421 wrote: post #12
phillipseamore wrote: post #2

Completely ignores cost of travel and value of time. Factor that in and the additional cost is either comparable or less.

If you had to drive 30 mins round trip in the largest truck with the worst MPGs, you still wouldn’t be anywhere close to 90% of the meal.

I would wager that it's fairly common for people to be ordering Uber Eats to be making >$20/hr. So it's worth a $10 delivery fee just for the time, not to mention having to put on outerwear, brave the weather, etc.
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