We recently uncovered one on-demand delivery app that was charging extremely high service fees of at least 19%. Looking closer into the on-demand delivery apps you can find fees scattered everywhere and changing more often than you might think. It pays to examine each order you make on these apps and make sure a new fee or higher charge doesn’t pop up. It’s also best to compare the apps on a regular basis to know which ones charge what fees from what restaurants.
A Quick look at the Fees from February 2018 show the following:
Door Dash: 11% Service Fee Plus Delivery Fee.
Postmates: 19-22% Average Service Fee Plus Delivery Fee. $1.99 Small Plate Fee.
Grubhub: Just a Delivery Fee but they may charge extra per plate.
UberEats: Just a Delivery Fee and all the charges are upfront.
Amazon Restaurants: They charge restaurants 30% but also charge customers a delivery fee.
Favor: $6 Default Delivery Fee unless there’s a delivery price listed.
What’s upsetting is that Door Dash and Postmates will advertise a free delivery in marketing but then you place the order and see the service fees hidden under Taxes and Fee above the regular Delivery Fee. This is not a Free Delivery but rather a Delivery with only a Service Fee. You will still be paying a fee on any delivery with these apps unless they have a special partnership with the merchant which are few and far between.
UberEats delivers meals at menu price, plus a clearly marked delivery fee. In exchange they charge the restaurant a modest service fee that in most cases is less than the cost of operating their own delivery service. The restaurants are normally charged 30% or so in fees on the order but the consumer doesn’t have to pay this like you would with Postmates.
Companies such as GrubHub, Postmates, and Seamless charge some restaurants roughly 12 to 24 percent of checks to use their services. UberEats and Amazon Prime Now are asking for a much steeper rate such as 30 percent. The good thing about using UberEats and Amazon Restaurants is that they charge the restaurant instead of the person ordering food.
While some restaurants pay DoorDash a commission for each delivery, others don’t, and when you order from the ones that don’t, DoorDash charges you extra. Previously, DoorDash incorporated that extra cost into the price of each menu item. So the prices in DoorDash were different from the ones you’d see in the restaurant, but you knew exactly how much you were paying. Now, in response to customer feedback and internal testing they show you a separate fee of 11%.
We reached out to Postmates on this matter and they feel that the fees are not hidden and that you can see all of the fees listed before the order is placed. This is not exactly true with some orders. They also said that the fees go towards running their operations behind the scenes. That’s 19% upwards in service fees alone just to pay for operations in the background of that order. We do acknowledge that Postmates has on of the better customer service departments when you have problems with your order.
Our Favorite On-Demand Food Delivery Pick
The best food delivery app is by far UberEats when it comes to upfront pricing and how fast you will get your food. The biggest drawback of UberEats is they don’t have many restaurants signed on to their service. Hopefully it will grow. Grubhub and Amazon Restaurants would be our second pick since they don’t charge service fees (yet). They also offer very few restaurants compared to Postmates that seem to offer the most but charge more in fees.
The worst is Favor because you don’t get any estimate of fees when you place the order. This also goes for Postmates when you place an order from a restaurant or a customized food item not in the app. You can just assume they will both charge at least $6 to your order.
While these food delivery apps will try and earn your loyalty these increasing fees and mostly hidden fees show you shouldn’t be loyal to any of them. Always compare.