WHEN IT COMES TO FEES, NOT ALL DELIVERY SERVICES ARE CREATED EQUAL
Not long ago, if you wanted a meal delivered to your home, your choices were generally limited to pizza or Chinese. Today, thanks to the booming food delivery industry, diners can order almost any cuisine imaginable, from grain bowls and poke to Texas barbecue and Vietnamese pho. With so many options now available across the country, we wanted to understand how pricing and fee structures vary across the major delivery platforms, and ultimately identify the least expensive and most expensive delivery platform for consumers.
We did this by ordering from a total of 250 restaurants across 50 major metropolitan areas. In each metro, we ordered from the same five restaurants on DoorDash, Grubhub, Postmates and Uber Eats. We placed identical food orders and each order was delivered to the same delivery address.
Our findings surprised us. It turns out that the price of ordering an identical meal, from an identical restaurant, to be delivered to an identical address can be wildly different depending on the delivery service used by the consumer.
We placed orders with food totals between $15 and $50, and 67% of orders were between $25-$30. All four platforms charged a similar price for food – which is what we would expect since we placed the same order on each platform – but the biggest difference in cost was in the fees.
TO FEE OR NOT TO FEE
Many consumers have come to expect a delivery fee for the convenience of getting food brought to their door. In our research, the average delivery fees were $1.89 on Uber Eats, $2.76 on DoorDash, $3.26 on Grubhub, and $3.45 on Postmates. But consumers might not realize that there is often a service fee as well. It’s in this service fee where we found bigger discrepancies, with the cost ranging from no service fee on Grubhub, to $3.09 on DoorDash, $3.64 on Uber Eats, and $4.97 on Postmates. These service fees are often hidden in the overall bill, with DoorDash and Postmates both requiring the consumer to manually open the “Taxes & Fees” section of the receipt to view the charge.
These fees may seem like only a few extra dollars here or there, but they can sometimes add up to nearly a third of the cost of the original food order. Consumers who ordered from Postmates faced fees that were 30% of the food total, on average. It was 21% for DoorDash, 20% for Uber Eats, and 12% for Grubhub – less than half of what a Postmates user could expect.
SAME ORDER, DIFFERENT PRICES
When you add it all up, consumers using Grubhub are paying the lowest price nearly seven out of 10 times for the same exact meals – that’s four times more frequently than diners using any other platform. Grubhub’s lack of a service fee gave it an edge over other platforms, despite it having a slightly higher delivery fee at times. On the other end of the spectrum, Postmates was the highest priced option for two out of every three orders, with both the highest average service fee and the highest average delivery fee.
The question now becomes whether tech-savvy consumers – who realize just how much prices vary for identical meals – will begin to compare prices across platforms and favor the lowest priced option. Until recently, many consumers have viewed food delivery as a novelty. But as availability rapidly expands across the country, and more restaurants recognize its potential to drive additional orders, the excitement – and the willingness to pay significant fees – may begin to wear off. Will consumers then begin to favor companies with lower prices? That remains to be seen.