There are plenty of arguments not to use third-party delivery apps. Most of these center on workers’ rights: the folks that bring you your food are working for low pay and often without tips. But they’re also charging restaurants exorbitant hidden fees. And last month, some restaurant owners reported that their businesses had been listed on Grubhub and Seamless without their consent. And now Brian X. Chen, a technology reporter for The New York Times, has another reason: they are upcharging you, sometimes egregiously.
Chen priced out delivery orders on Grubhub, DoorDash, Postmates, and Uber Eats and compared them to the cost of ordering the same meal at the restaurant. “The markups on the food deliveries were 7 percent to 91 percent more than what you would pay if you bought the meal directly from the restaurant,” he writes. “Yep, you read that right.”
Most of the extra costs come from service charges and delivery fees; Uber Eats also has “surge pricing” similar to the model it uses for its rideshare service and a “small order fee” which meant that Chen was charged $3 extra for a couple of six-inch turkey subs from Subway. But sometimes the restaurants charge higher prices for delivery: Chen discovered that Panda Express charged $39 for its family meal in-house, but up to $47.10 for delivery. And that was before the delivery and service fees and sales tax.
Coincidentally, the Times published another story this morning about how the New York City Council is considering a pair of bills that will regulate third-party apps by requiring them to be licensed through the city’s Department of Consumer Affairs and to limit the commission fees they’ve been charging restaurants to 10%. The bills don’t address worker rights, but Mark Gjonaj, the chairman of the Council’s small business committee and one of the sponsors of the two bills, says he’s not done investigating. This legislation is separate from the hearing the New York State Liquor Authority held last fall about capping third-party delivery fees.
Representatives from Grubhub, which controls most of the third-party delivery in New York, have argued that the company actually helps restaurants by bringing them to the attention to new customers, but restaurant owners say the fees aren’t worth it.
So what can you, the customer, do about it? Chen suggests stopping by the restaurant to get your takeout yourself, or even cooking. (How novel.) But you can also make an effort to order from local restaurants who employ their own delivery people: a win for everyone.