We recently used a popular food delivery app to order burgers from a favorite local joint for local pickup, and were surprised when the guy at the counter advised “next time phone directly, don’t use the platform.” Well, the price is the same, and there was a coupon, so why bother?
It turns out that the price is not the same, and not a lot of restaurants out there eat the deliver app fees as our local joint did. While they were acting in self-interest, the markups that the delivery platforms charged even before the pandemic hit had taken a really ugly turn in the meantime, and most places pass the fees to the hungry (and lazy) app users, it turns out.
Ordering one and the same burrito and taco via UberEats, Deliveroo, and the fledgling Just Eat, yielded pretty different prices, with Deliveroo being the worst offender, charging the equivalent of $61 for the privilege to load some Mexican fast food on an exhausted bike courier who you’d still tip when they showed at the door, too.
Delivery apps’ markup for groceries aren’t as bad as for takeout, but still significant
The delivery services claim that their markups are fair and the costs of running the networks are high, and, looking at the fact that most of them run at a loss, that almost sounds plausible.
The fact of the matter, however, is that the food delivery gig economy runs on printed Fed money fumes funneled via startup capital and IPOs. At some point the gig will be up, the apps will have to show profits for investors, and we can only imagine the markups once you are hooked to pressing a button on your phone to get a burrito twenty minutes later. Are you addicted to the universe of food delivery apps already?
