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Meals on food delivery apps can be 90% more than if bought from the restaurant
- phillipseamore 7y agoCompletely ignores cost of travel and value of time. Factor that in and the additional cost is either comparable or less.
- deleted 7y ago[deleted]
- lm28469 7y agoI made my choice a long time ago. Between waiting literally one hour, getting cold food and paying a premium for it (several times) VS taking my bike and going to the restaurant myself in 10 min, it was an easy choice.
- wil421 7y agoIf 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.
- ses1984 7y agoTime is scarce.
- chooseaname 7y agoOnly when mismanaged.
- joncrane 7y agoI 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.
- kube-system 7y ago30 minutes is easily 90% of a meal, even at city traffic speeds and minimum wage. 57.5 IRS mileage rate * 20 mph average over 30 minutes = $ 5.75 30 minutes US minimum wage = $3.625 Total: $9.375 This would be 90% of a $10.42 meal.
- JoeAltmaier 7y agocitation? Any facts to support that? Because the article addresses exactly those issues.
- theGreatgame 7y agoIt would be great if Hacker news could add tags to these posts letting us know when there is a paywall.
- justanotherc 7y agoAgree
- snarfy 7y ago" Are paywalls ok? It's ok to post stories from sites with paywalls that have workarounds." There is no workaround. HN hasn't honored their own policy in years. At this point I can only assume there is a referral deal.
- trevyn 7y agoArchive.is works: http://archive.is/GbUIH http://archive.is/GbUIH
- mdrzn 7y agoAgree, the google search workaround doesn't even work anymore. Either post directly the archive.is version or find another source, it's only gonna promote article-skipping and comments based on headlines.
- atonse 7y agoAnd they don’t factor the harm caused to restaurant margins when these apps take 30%. But the convenience os hard to beat when you don’t want to take a long break.
- Spivak 7y agoI feel like it’s weird that the article doesn’t mention this. Restaurants feel pressured to be on these apps so they just up their prices to make the 30% cut worth it and users just blame the app for the price discrepancy rather than the restaurant.
- mrgreenfur 7y agoIn a effort to be nice to restaurants AND be lazy I have learned that seamless / grub hub do charge 30% but others do not: chow now charges a flat monthly fee and a card processing fee, but no inflated per order charge. Not sure about the others.
- justanotherc 7y agoThis is why I have never ordered UberEats. Plus cold McDonalds is gross. Its not hard to order takeout and run down the road myself. To be honest I don't really get why this whole trend is so popular.
- swat535 7y agoI don't understand. You will get cold McDonalds if you driver there yourself, pick the food and take it back to your home/office as well. Unless you are advocating for: spending time to drive there, order, get lucky enough to find a seat, spend more time there eating and finally spend time driving back. Honestly, the $5 is a huge time saver for most people and they gladly pay it. Those who rather save the money, can perform all the steps above.
- throwaway71719 7y agoYou are assuming that the delivery service driver: 1. is at McDonalds when the order is prepared 2. brings the order directly to you, takes the shortest route, etc.
- derision 7y agoPeople are increasingly more lazy
- AndrewDucker 7y agoWell, 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.
- eugeniub 7y agoDid you read the article? Much of the markup comes from restaurants charging higher prices for the same items if they are delivered.
- 9nGQluzmnq3M 7y agoYes, as the article explains, that's how restaurants compensate for the delivery companies taking a fat cut of their revenue.
- ben509 7y agoThe author should have priced out a $50 order as well. Most delivery only makes sense if you're buying a big meal, because the marginal cost of delivering a second pizza is almost zero. Of course, this is also why tipping by percent is stupid system for delivery.
- deleted 7y ago[deleted]
- hamilyon2 7y agoI don't really understand what this article is about. There is a market opportunity. Companies see it and move into new market. More people's needs are fulfilled than before. Market economy works! Not news.
- braythwayt 7y agoThis is a site devoted to business as much as technology. The details of HOW markets work are vital to understand for people doing business in a market. For example, understanding how the revenue is distributed amongst all the participants in a value chain is relevant and highly interesting. Thus, the article, the upvotes, and the discussion.
- cthor 7y agoMostly yes. But a lot of these companies are operating at big losses funded by VC money.
- ryanmercer 7y agoPretty much. I'll be like oh nice that's 6$ and I'll add that for 3$ and great "Your total: 74.95, would you like to tip 20%?"
- SN76477 7y agoFood 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, and typically much less than $15 an hour. All of this is happening while Doordash has a 10billion dollar valuation.
- walrus01 7y agoFood delivery by car should actually be way more expensive than it is, if you consider the standard IRS mileage reimbursement rate for driving.
- michaelt 7y agoIn my country, business mileage rates are based on the depreciation of a car that is quite nice, and quite new. The kind of car a professional salesperson might drive to visit clients. For a delivery driver to show up in a BMW would be... very unusual.
- hansvm 7y agoI delivered pizza for a couple years before getting my life together, and I can definitely confirm that vehicle costs can be much lower than the IRS standard mileage deduction. I averaged $0.16/mi in insurance, depreciation, repairs, maintenance, tires, gas, washes, and every other cost put together. You can't pull that off as an Uber driver because you need to make a good impression, but food delivery costs can be pretty low.
- AlexandrB 7y ago> Restaurants are asked to pay 30% of the ticket. I was not aware of that. I can see the logic (“we’re providing a service for your business”, etc.) but it feels like double dipping. Especially since it seems as though that cost is passed straight onto the customer anyhow.
- Izmaki 7y agoDear NYT: if all I can see when I visit your article is your advertisement and a request to create an account to continue, I'm closing the tab again.
- cmauniada 7y agoTry this if you are using chrome: https://github.com/iamadamdev/bypass-paywalls-chrome https://github.com/iamadamdev/bypass-paywalls-chrome I think there is also a firefox addon by the same developer.
- braythwayt 7y agoAnecdatum: 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.
- rs23296008n1 7y agoThey'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.
- cik 7y agoI find the niche answer to this fascinating. With kosher restaurants (captive audience) in my city: 1. They increase their prices on skipthedishes and friends, in order to account for the price difference. 2. They add a piece of paper to EVERY ORDER indicating that if you call or text your food would be 30% cheaper, which includes a flat $3 delivery fee, and no need to tip the driver. 3. Many of them run targeted sub-brands on these platforms, under 'regular' (re: non kosher) restaurants and do the exact same thing, thereby expanding their reach.
- danShumway 7y ago> They add a piece of paper to EVERY ORDER indicating that if you call or text... That's really clever, given that many of these delivery apps work by inserting themselves invisibly in front of the business. Having a communication channel that you know will reach the customer and that you know the delivery app can't block is a way of getting around some of the constant fight of "how do I make my real site show up above Grubhub's when my name is Googled?"
- chrisseaton 7y agoBusinesses are deluding themselves here. People use the big apps because they don't want to install a billion different special-case apps, set up their payments, set up their address etc etc etc, or literally phoning the restaurant (people don't want to speak on the phone anymore, they find it awkward.) Hotels try to berate you for booking through a third-party but I ain't got time to go poking around on their individual websites. Same with taxis - 'don't use Uber, just install this local app' - nice idea, but I really don't have time or space for a trillion local apps for the cities I visit all working slightly differently and needing different accounts - I try to keep it simple. I don't care if it's 5% better or 5% cheaper - it's 100% overhead compared to a single app and I don't want it.
- koolba 7y ago> I try to keep it simple. I don't care if it's 5% better or 5% cheaper - it's 100% overhead compared to a single app and I don't want it. It’s not 5% though. It’s more like 50-100%. I’d wager you’re in the minority and most people are not willing to pay a premium if they could avoid (or maybe even knew about it).
- lowercased 7y agowhat I want is a simplish way to text a restaurant my main basic wants, have them call me back via voice to confirm and make any adjustments, then I go pick it up. or... maybe delivery (I don't live in an area where delivery is huge but maybe that a gotta-have in some places). I don't like calling because I'm always put on hold - call me back within 2-3 minutes, when you're actually calling me, vs me interrupting you. confirm the basics of what I texted you, but if you have a special going, or i ordered a 'wrong' size, etc. fix it. confirm price. send back via text. you can 'own' the relationship then, without a middleman. you can confirm via voice, do your upsells, warn me of any delays, etc.
- buckminster 7y agoI don't understand why takeaways very rarely publish an email address. If they can receive orders from Uber (or whoever) they can receive an email.
- Jommi 7y agoWhat are you on about? It's a completely different experience. Do you want me to open it up how integrated uber eats is with the restaurant?
- grayed-down 7y agoAbsolutely agree! I even do this with a local Chinese restaurant. We email them our order and they'll call back if there's a question. They only called back once on a pretty big order.
- lowercased 7y agoFWIW, I text in an order to our local burger place now and then, as I'm a regular, they know me, and I get the same thing every time. Normally it's something like "regular - I'll be in in 15 min". If there's a problem, they text back with "no" or "wait" or "30 min" or whatever... "Food ordering" outside of "food delivery" should be a separate category. "Food ordering" businesses, imo, likely have a wider audience.
- alberto-m 7y ago(small typo in the post title: "90% more than" should be "90% more expensive than")
- deleted 7y ago[deleted]
- ipunchghosts 7y agoWho cares? Some people wish to pay for convenience. Let the market figure out what that is worth.
- Jommi 7y agoWell this convenience could be shown as a single fee, the delivery fee. Adding to the price might seem non transparent and an example of clouding the consumers judgement.
- grayed-down 7y agoThe wisest comment yet!
- cltsang 7y agoI find it very interesting that, according to my own brief observation, almost the opposite situation is happening in China. In China the dominant food delivery platforms are ele.me and meituan. The food offered there are not marked-up so ridiculously compared to dining in. As far as I understand, this is because 1. The demand is huge. People prefer food delivery, especially for lunch, to save time to either play mobile games, or squeeze more hours for work. Another reason is much more choices are available online than say within 10 minute commute. 2. Due to 1, food preparation is often moved to backstreet or upstairs where rent is significantly lower. 3. Due to 2, many sketchy food providers on the platforms are not actually restaurants. So, they don't have to bare the cost of regulation compliance like license or hygiene standards.
- thaumasiotes 7y agoLabor costs are lower. Delivery is 100% labor costs. (It's worth observing in passing, for those who don't know, that the URL ele.me is the mandarin equivalent of "hungry.questionmark".)
- kentosi 7y ago"I focused my tests on DoorDash, Postmates, Grubhub and Uber Eats, the four largest delivery apps in the United States." I'm stumped. I live in NYC and all my friends use Seamless. I even have colleagues that will describe these companies mentioned as a "Seamless clone".
- phonon 7y agoGrubhub owns Seamless
- Fnoord 7y agoIsn't it misleading to mention sales tax in the inclusion? You're always going to pay for it anyway, right (I am not from USA)? Why not simply either avoid mentioning it in the comparison, or add it everywhere (which is a long term fix).
- pmoriarty 7y agoAs pricey as they are, they'll likely be doing some brisk business soon as more and more people stay home and order out in the wake of the COVID-19 outbreak.
- grayed-down 7y agoI found this great food delivery app. It's you! How it works is, you actually call and speak to someone at the restaurant you want to order from. They take your order, and at a pre-arranged time, you get into your car and go pick it up and bring the food to where you want to eat it. Warning: This app is not for everyone
- deleted 7y ago[deleted]
- Fire-Dragon-DoL 7y agoReally? I tested this the other day and with the required tip, i ended up paying basically the same. I was actually pretty annoyed by the fact (I have a 2 years old, so eating at the restaurant takes some parenting effort)