We recently used a popular food delivery app to order burgers from a favorite local joint for local pickup, and were surprised when the guy at the counter advised "next time phone directly, don't use the platform." Well, the price is the same, and there was a coupon, so why bother?
It turns out that the price is not the same, and not a lot of restaurants out there eat the deliver app fees as our local joint did. While they were acting in self-interest, the markups that the delivery platforms charged even before the pandemic hit had taken a really ugly turn in the meantime, and most places pass the fees to the hungry (and lazy) app users, it turns out.
According to a study by the comparison shoppers from Which?, if you order food to be delivered from your iPhone or Android app you must be prepared to pay up to 44% more for it than if you simply go there and pick it up. Of course, that is the maximum difference with the delivery and service fees, but the 23% average markup doesn't sound all that palatable, either, pun intended.
Ordering one and the same burrito and taco via UberEats, Deliveroo, and the fledgling Just Eat, yielded pretty different prices, with Deliveroo being the worst offender, charging the equivalent of $61 for the privilege to load some Mexican fast food on an exhausted bike courier who you'd still tip when they showed at the door, too.
That's 44% above what the same food costs at the restaurant, and a shame if you live nearby. The same goes for grocery delivery, too, the popularity of which really shot up during the lockdowns.
Delivery apps' markup for groceries aren't as bad as for takeout, but still significant
The delivery services claim that their markups are fair and the costs of running the networks are high, and, looking at the fact that most of them run at a loss, that almost sounds plausible.
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The fact of the matter, however, is that the food delivery gig economy runs on printed Fed money fumes funneled via startup capital and IPOs. At some point the gig will be up, the apps will have to show profits for investors, and we can only imagine the markups once you are hooked to pressing a button on your phone to get a burrito twenty minutes later. Are you addicted to the universe of food delivery apps already?
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Daniel, a devoted tech writer at PhoneArena since 2010, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he's keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.
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