Food from the restaurant of your choosing, delivered right to your door — but at what cost?
Third-party food delivery has become the norm for American consumers, with apps like Grubhub, DoorDash, and Uber Eats becoming essential for day-to-day dining. However, the convenience comes with a complicated equation of service fees, delivery costs, and tips, causing frustration for both customers and restaurants.
Consumers have reported higher yearly increases in their total bills when using third-party apps compared to orders made directly through restaurant sites, according to Technomic. Despite promotional memberships offering reduced fees, users still claim to pay more on average for third-party orders.
The rising costs come at a time when more Americans are tightening their budgets due to persistent inflation. San Francisco resident Zainab Batool, who orders delivery weekly, described the added fees as “insane” and noted that they seem to keep increasing.
Technomic’s 2024 Delivery & Takeout Consumer Trend Report found that the share of consumers using third-party delivery services rose from 15% in 2020 to 21% in 2024. Superior order tracking, deals and promotions, and the ability to discover new restaurants have kept customers returning to these apps. However, high delivery fees and inflated menu prices are driving some consumers away.
Grubhub, DoorDash, and Uber Eats have all stated their commitment to keeping fees as low as possible while covering the rising costs associated with handling deliveries. Nevertheless, the prices for third-party delivery remain higher, with premiums nearly doubling since 2020, according to Gordon Haskett Research Advisors.
Restaurant owners like Tony Scardino of Professor Pizza in Chicago use multiple third-party delivery services despite describing the pricing as “predatory.” For smaller businesses, the convenience and reach of these platforms can outweigh the high fees. However, this often leads to increased menu prices to cover the costs, making dining out more expensive for consumers.
In response to the rising costs, all three major delivery services have ramped up monthly membership options, offering free delivery and other perks for a subscription fee. These memberships aim to lower the all-in order costs for frequent users and cultivate loyalty among their customer base.
Despite these efforts, consumers like Batool remain frustrated by the lack of transparency around service fees and tipping. Many feel that service fees should go towards compensating delivery drivers, but the complexity of the fee structure leaves them uncertain about where their money is going.
The debate over the true cost of convenience continues, as both diners and restaurants navigate the evolving landscape of third-party food delivery.
READ MORE: