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Could you explain further? The restaurant gets the order at the same price, Uber adds delivery fees and a 25% markup on the cost of food. Why would these number

Could you explain further? The restaurant gets the order at the same price, Uber adds delivery fees and a 25% markup on the cost of food. Why would these numbers not work out in the kitchen's favor? Maybe I'm missing something. Genuinely curious.

Sayrus 1y ago
While you pay a markup on the application, UberEats and others keeps 25/30% of the price based on the marked up price. If you make the calculation they usually have to cut into the kitchen margin while the price for the customer stays more expensive.
- MetaWhirledPeas 1y ago
  Can't the restaurant just say no?
  - _heimdall 1y ago
    Unless something has changed over the last couple years, restaurants opt in to being available on those apps. Uber Eats and the others are generally integrated into the restaurant's point of sales system.
    - ivape 1y ago
      That would explain why they sell less or cheaper food, which appear too high on the app due to the markup they have to add to the price to handle the fees. This would be an alternate explanation to why things seem inflated. Even with inflated ingredients prices, it actually still doesn’t add up how the volume dropped so much such that each unit would need to cost that much more (I’m arguing it can’t just be the ingredient prices being high). The fees adding to the perceptual inflation make sense. It’s more expensive volume or less cheaper volume they can make due to higher ingredient prices PLUS the fees they have to add to cover the delivery service cut. That’s how you get a $20 burger for delivery. This all gets worse when the prices become sticky at the retail place itself (app prices enter the real world). These delivery service are a serious agitator, true disrupter.
    - inferiorhuman 1y ago
      Nah. Those delivery services were opt-out until California passed a law in 2021 prohibiting that kind of behavior.
      - BobaFloutist 1y ago
        Ok, but if they're doing it without the restaurant's buy in, then they're presumably just acting as a middleman and ordering from the restaurant themselves, at which point I'm not sure how they're stiffing the restaurant 20-30%. If I were running a restaurant and Doordash kept calling me trying to submit an order for cheaper than the food costs I would simply decline to take their business...?
        inferiorhuman 1y ago
        Doordash puts up a listing for a restaurant and siphons off take-out traffic. Once Doordash gets a critical mass they can turn around and "negotiate" with the restaurant.
        notpushkin 1y ago
        And the restaurant can say “no.” If I were a restaurateur and caught a glimpse of a Doordash driver in my finest establishment, the first thing I would do is put together a simple online order form and start advertising it in every order. If you just disappear from the app one day, your customers trying to reorder would probably go somewhere else – but if they know they can order on your site instead, they probably will (if your food is good enough and your ordering experience is top-notch, or vice versa).
        inferiorhuman 1y ago
        And the restaurant can say “no.” And now you have hordes of angry customers who can't understand why you have a Doordash listing (that you didn't create and don't want) but won't fulfill orders. If I were a restaurateur and caught a glimpse of a Doordash driver in my finest establishment, the first thing I would do is put together a simple online order form and start advertising it in every order. Whether it's not wanting to give Doordash a cut, not wanting to sell food that doesn't travel well for delivery, not wanting to crowd out local customers, not wanting Doordash to hijack their brand, not wanting Doordash to crowd out their own in-house delivery, or whatever actual restaurant owners litigated these forced listings because they didn't want to be listed on Doordash. e.g. https://boston.eater.com/2016/3/4/11160924/legal-sea-foods-sues-doordash-trademark-infringement https://boston.eater.com/2016/3/4/11160924/legal-sea-foods-s...
  - ignormies 1y ago
    Not always - https://www.eater.com/2020/1/29/21113416/grubhub-seamless-kin-khao-online-delivery-mistake-doordash https://www.eater.com/2020/1/29/21113416/grubhub-seamless-ki... - https://www.knoxnews.com/story/entertainment/dining/2018/10/19/doordash-local-food-delivery-service-leaves-bad-taste-eateries/1533938002/ https://www.knoxnews.com/story/entertainment/dining/2018/10/... - https://lawstreetmedia.com/featured/restaurant-sues-doordash-for-falsely-advertising-partnership-redirecting-users/ https://lawstreetmedia.com/featured/restaurant-sues-doordash... - https://www.golocalprov.com/news/legal-but-unethical-ri-restaurants-speak-out-on-unauthorized-food-delivery https://www.golocalprov.com/news/legal-but-unethical-ri-rest... - https://www.wctv.tv/2023/12/19/phony-restaurant-listing-doordash-creates-headache-pizzeria-its-customers-manager-says/ https://www.wctv.tv/2023/12/19/phony-restaurant-listing-door...
    - khannn 1y ago
      [dead]
    - Capricorn2481 1y ago
      These stories are horrible, but that doesn't prove restaurants lose money on Doordash. One of my clients bootstraps online ordering for restaurants. About 80% of those restaurants request to be on Doordash, and have been on there for many years. I assume they're not all dumbasses losing money on every order. Doesn't excuse Doordash taking advantage of anyone.
      - samtho 1y ago
        Not every restaurant can handle the deferred payout either. Their business is based on receiving payment at the time of service. The restaurant model operates on razor thin margins, and they don’t buy their food on net 30 terms, but they have to absorb costs as if they do. There are other issues, but this setup looks a lot like paying the mafia due to the imbalance of power.
        hackernewds 1y ago
        Sure but you're blurting generic talking points that don't address the evidence of Doordash hosting millions of restaurants obviously profitably for the restaurants
  - AlecSchueler 1y ago
    When the market is captured by the marketplace apps: No, not really
  - thrance 1y ago
    Sure they can, and go bankrupt because people order more than they go to restaurants nowadays.
- Calavar 1y ago
  That's my understanding. Uber takes 25%, but by default that's offset by increasing the on-app price 25% relative to the in-store price, and the owner has to explicitly opt out of that behavior. So at the end of the day, they should be getting the same amount as in store orders unless they opted out of the markup, right?
  - deleted 1y ago
    [deleted]
  - mcintyre1994 1y ago
    That calculation doesn’t work. If an item costs $10, and Uber marks it up 25% then Uber lists it at $12.50. When Uber takes 25% of the marked up price, they’re taking $3.125 and the restaurant is getting less than $10.
    - prepend 1y ago
      Under would just mark up the price to $13.33 so after they take their 25% the restaurant would get $10.
vvpan 1y ago
I have seen Doordash statements where commission + fees added up to 60% of the price. I asked the person who mostly worked with restaurant owners why they do it. He said: 1. A lot of restaurants are passion businesses and they don't realize how much money they are losing. 2. Morale in the kitchen is important, orders coming in keeps morale up. From myself I would also add that they get a FOMO, cause it's hard to sit and watch others get business, however unprofitable. The most stable and profitable businesses in towns where we operated only worked with us, cause we offered cooperative ownership and small commission. It made no financial sense for them to work with anybody else.
- hackernewds 1y ago
  To be really honest, neither of these reasons add up. Are you really suggesting that restaurants are losing large chunks of dollars yearly in every order to keep their staff and themselves "passionate"? Doordashes filings as a public company have stated that the average revenue share with restaurants is 18% and maximum is 30%
  - vvpan 1y ago
    That number includes chains. Those restaurants (McD's for example) get preferential treatment - they are on the front-page and they pay no or little commission. That would skew the average. And maximum probably does not include all the potential add-on fees.
- terminalshort 1y ago
  I don't buy it for a second that restaurants don't know they are losing money. Just sounds like some made up bullshit because you have an axe to grind with Doordash.
  - vvpan 1y ago
    What is making you skeptical?
    - 1y ago
filloooo 1y ago
It's like any e-commerce platform where the platform cares only about maximising revenue and minimising costs. Pitting restaurants against each other on who can cut corners the best. You often get worse meals at higher prices. This business model essentially makes sure all the surviving ones are those who can get by on the lowest profits.
- chronci739 1y ago
  > This business model essentially makes sure all the surviving ones are those who can get by on the lowest profits. And what’s wrong with “lowest profit”? If that equates to lower quality, you as a customer are free to select the more expensive restaurant on DoorDash. Airlines have tiny profit (single digit $ per passenger) yet there’s no sympathy for them. So “big greedy corporation” vs “mom and pop shop” is the core reason, yeah?
  - oblio 1y ago
    And then you wonder about the obesity crisis.
    - chronci739 1y ago
      > And then you wonder about the obesity crisis. China has drone food delivery. Lower profits than American delivery. China ain’t obese. Try again.
      - oblio 1y ago
        https://en.wikipedia.org/wiki/Obesity_in_China https://en.wikipedia.org/wiki/Obesity_in_China > Obesity in China is a major health concern according to the WHO, with overall rates of obesity between 5% and 6% for the country,[2] but greater than 20% in some cities where fast food is popular. > Rapid motorization has drastically reduced levels of cycling and walking in China. Reports in 2002 and 2012 have revealed a direct correlation between ownership of motorized transport by households in China and increasing obesity related problems in children and adults. > A leading child-health researcher, Ji Chengye, has stated that, "China has entered the era of obesity. The speed of growth is shocking." You're sooooo clever. Edit: extra LOL at creating the account to criticize and then downvote facts in the reply.

Sayrus 1y ago

While you pay a markup on the application, UberEats and others keeps 25/30% of the price based on the marked up price. If you make the calculation they usually have to cut into the kitchen margin while the price for the customer stays more expensive.

MetaWhirledPeas 1y ago
Can't the restaurant just say no?
- _heimdall 1y ago
  Unless something has changed over the last couple years, restaurants opt in to being available on those apps. Uber Eats and the others are generally integrated into the restaurant's point of sales system.
  - ivape 1y ago
    That would explain why they sell less or cheaper food, which appear too high on the app due to the markup they have to add to the price to handle the fees. This would be an alternate explanation to why things seem inflated. Even with inflated ingredients prices, it actually still doesn’t add up how the volume dropped so much such that each unit would need to cost that much more (I’m arguing it can’t just be the ingredient prices being high). The fees adding to the perceptual inflation make sense. It’s more expensive volume or less cheaper volume they can make due to higher ingredient prices PLUS the fees they have to add to cover the delivery service cut. That’s how you get a $20 burger for delivery. This all gets worse when the prices become sticky at the retail place itself (app prices enter the real world). These delivery service are a serious agitator, true disrupter.
  - inferiorhuman 1y ago
    Nah. Those delivery services were opt-out until California passed a law in 2021 prohibiting that kind of behavior.
    - BobaFloutist 1y ago
      Ok, but if they're doing it without the restaurant's buy in, then they're presumably just acting as a middleman and ordering from the restaurant themselves, at which point I'm not sure how they're stiffing the restaurant 20-30%. If I were running a restaurant and Doordash kept calling me trying to submit an order for cheaper than the food costs I would simply decline to take their business...?
      - inferiorhuman 1y ago
        Doordash puts up a listing for a restaurant and siphons off take-out traffic. Once Doordash gets a critical mass they can turn around and "negotiate" with the restaurant.
        notpushkin 1y ago
        And the restaurant can say “no.” If I were a restaurateur and caught a glimpse of a Doordash driver in my finest establishment, the first thing I would do is put together a simple online order form and start advertising it in every order. If you just disappear from the app one day, your customers trying to reorder would probably go somewhere else – but if they know they can order on your site instead, they probably will (if your food is good enough and your ordering experience is top-notch, or vice versa).
        inferiorhuman 1y ago
        And the restaurant can say “no.” And now you have hordes of angry customers who can't understand why you have a Doordash listing (that you didn't create and don't want) but won't fulfill orders. If I were a restaurateur and caught a glimpse of a Doordash driver in my finest establishment, the first thing I would do is put together a simple online order form and start advertising it in every order. Whether it's not wanting to give Doordash a cut, not wanting to sell food that doesn't travel well for delivery, not wanting to crowd out local customers, not wanting Doordash to hijack their brand, not wanting Doordash to crowd out their own in-house delivery, or whatever actual restaurant owners litigated these forced listings because they didn't want to be listed on Doordash. e.g. https://boston.eater.com/2016/3/4/11160924/legal-sea-foods-sues-doordash-trademark-infringement https://boston.eater.com/2016/3/4/11160924/legal-sea-foods-s...
- ignormies 1y ago
  Not always - https://www.eater.com/2020/1/29/21113416/grubhub-seamless-kin-khao-online-delivery-mistake-doordash https://www.eater.com/2020/1/29/21113416/grubhub-seamless-ki... - https://www.knoxnews.com/story/entertainment/dining/2018/10/19/doordash-local-food-delivery-service-leaves-bad-taste-eateries/1533938002/ https://www.knoxnews.com/story/entertainment/dining/2018/10/... - https://lawstreetmedia.com/featured/restaurant-sues-doordash-for-falsely-advertising-partnership-redirecting-users/ https://lawstreetmedia.com/featured/restaurant-sues-doordash... - https://www.golocalprov.com/news/legal-but-unethical-ri-restaurants-speak-out-on-unauthorized-food-delivery https://www.golocalprov.com/news/legal-but-unethical-ri-rest... - https://www.wctv.tv/2023/12/19/phony-restaurant-listing-doordash-creates-headache-pizzeria-its-customers-manager-says/ https://www.wctv.tv/2023/12/19/phony-restaurant-listing-door...
  - khannn 1y ago
    [dead]
  - Capricorn2481 1y ago
    These stories are horrible, but that doesn't prove restaurants lose money on Doordash. One of my clients bootstraps online ordering for restaurants. About 80% of those restaurants request to be on Doordash, and have been on there for many years. I assume they're not all dumbasses losing money on every order. Doesn't excuse Doordash taking advantage of anyone.
    - samtho 1y ago
      Not every restaurant can handle the deferred payout either. Their business is based on receiving payment at the time of service. The restaurant model operates on razor thin margins, and they don’t buy their food on net 30 terms, but they have to absorb costs as if they do. There are other issues, but this setup looks a lot like paying the mafia due to the imbalance of power.
      - hackernewds 1y ago
        Sure but you're blurting generic talking points that don't address the evidence of Doordash hosting millions of restaurants obviously profitably for the restaurants
- AlecSchueler 1y ago
  When the market is captured by the marketplace apps: No, not really
- thrance 1y ago
  Sure they can, and go bankrupt because people order more than they go to restaurants nowadays.
Calavar 1y ago
That's my understanding. Uber takes 25%, but by default that's offset by increasing the on-app price 25% relative to the in-store price, and the owner has to explicitly opt out of that behavior. So at the end of the day, they should be getting the same amount as in store orders unless they opted out of the markup, right?
- deleted 1y ago
  [deleted]
- mcintyre1994 1y ago
  That calculation doesn’t work. If an item costs $10, and Uber marks it up 25% then Uber lists it at $12.50. When Uber takes 25% of the marked up price, they’re taking $3.125 and the restaurant is getting less than $10.
  - prepend 1y ago
    Under would just mark up the price to $13.33 so after they take their 25% the restaurant would get $10.

vvpan 1y ago

I have seen Doordash statements where commission + fees added up to 60% of the price. I asked the person who mostly worked with restaurant owners why they do it. He said: 1. A lot of restaurants are passion businesses and they don't realize how much money they are losing. 2. Morale in the kitchen is important, orders coming in keeps morale up. From myself I would also add that they get a FOMO, cause it's hard to sit and watch others get business, however unprofitable. The most stable and profitable businesses in towns where we operated only worked with us, cause we offered cooperative ownership and small commission. It made no financial sense for them to work with anybody else.

hackernewds 1y ago
To be really honest, neither of these reasons add up. Are you really suggesting that restaurants are losing large chunks of dollars yearly in every order to keep their staff and themselves "passionate"? Doordashes filings as a public company have stated that the average revenue share with restaurants is 18% and maximum is 30%
- vvpan 1y ago
  That number includes chains. Those restaurants (McD's for example) get preferential treatment - they are on the front-page and they pay no or little commission. That would skew the average. And maximum probably does not include all the potential add-on fees.
terminalshort 1y ago
I don't buy it for a second that restaurants don't know they are losing money. Just sounds like some made up bullshit because you have an axe to grind with Doordash.
- vvpan 1y ago
  What is making you skeptical?
  - 1y ago

filloooo 1y ago

It's like any e-commerce platform where the platform cares only about maximising revenue and minimising costs. Pitting restaurants against each other on who can cut corners the best. You often get worse meals at higher prices. This business model essentially makes sure all the surviving ones are those who can get by on the lowest profits.

chronci739 1y ago
> This business model essentially makes sure all the surviving ones are those who can get by on the lowest profits. And what’s wrong with “lowest profit”? If that equates to lower quality, you as a customer are free to select the more expensive restaurant on DoorDash. Airlines have tiny profit (single digit $ per passenger) yet there’s no sympathy for them. So “big greedy corporation” vs “mom and pop shop” is the core reason, yeah?
- oblio 1y ago
  And then you wonder about the obesity crisis.
  - chronci739 1y ago
    > And then you wonder about the obesity crisis. China has drone food delivery. Lower profits than American delivery. China ain’t obese. Try again.
    - oblio 1y ago
      https://en.wikipedia.org/wiki/Obesity_in_China https://en.wikipedia.org/wiki/Obesity_in_China > Obesity in China is a major health concern according to the WHO, with overall rates of obesity between 5% and 6% for the country,[2] but greater than 20% in some cities where fast food is popular. > Rapid motorization has drastically reduced levels of cycling and walking in China. Reports in 2002 and 2012 have revealed a direct correlation between ownership of motorized transport by households in China and increasing obesity related problems in children and adults. > A leading child-health researcher, Ji Chengye, has stated that, "China has entered the era of obesity. The speed of growth is shocking." You're sooooo clever. Edit: extra LOL at creating the account to criticize and then downvote facts in the reply.