Food Delivery Apps Like UberEATS Are Hurting Restaurant Business

In an article over at Tvo.org, analyst Corey Mintz has highlighted how popular food delivery apps like UberEATS, Foodora, DoorDash, Ritual, Just Eat, and many more, are hurting your favourite restaurants. The convenience that these apps bring to consumers comes at a high cost to restaurants, who are paying upwards of 35% commission on every sale.

Mobile apps allow hungry diners to get food from a wide variety of restaurants that don’t provide their own delivery, straight to their door without having to talk to anyone. However, not only does the food often arrive cold and cost more, when you order through food apps, restaurants take a major hit. 

When asked how much their services cost restaurants, Ritual and UberEATS revealed the range runs from 10% to 35%. UberEATs starts the highest, usually defaulting to 35% plus a $500 fee for the terminal. Some restaurateurs say they use these apps strictly for marketing purposes, hoping to break even on the high commissions while exposing their product to a larger audience.

“Uber is 30 per cent for us,” says Mollie Jacques, executive chef at Lambretta Pizzeria in Toronto. “And the app gets worse every time they upgrade; we now have no control over anything, and it is definitely losing us customers. Foodora is 25 per cent and DoorDash is a bit lower. Foodora has the best service. Doordash, we don’t make the food until the driver is in the door, as they are often so late the food is cold and we have to remake it.”

In 2015, California chain In-N-Out Burger sued Doordash in order to have their restaurants removed, with similar complaints now coming from restaurants in Ontario as well. 

To read the lengthy article in its entirety, click here.