Do Uber Eats and DoorDash Deliver Profits?

When, at already-in-your-pajamas o’clock, with Netflix alerting you the next episode will start in seven seconds, you realize you must have a bacon cheeseburger or a poké bowl, throwing a few extra bucks at a delivery app sounds like a bargain. Plus tip, of course — you’re not an animal. But how much of a deal that delivery will be for the restaurant preparing your meal is another question.

…While the diner only pays around $4.50 more for a given order, and the driver takes the usual trip fee plus tip, Uber Eats takes 30 percent of the cost of the meal off the restaurant’s end. Most restaurants operate on margins slimmer than that, meaning Uber Eats’ cut could leave them barely breaking even or losing money on each delivery. Some of the owners and managers the Journal spoke to said they trimmed which items were listed on the app accordingly, but none said they were comfortable hiking the cost to customers.

Theresa Powell, manager at Stars Hamburgers in Arcata, says the local icon is considering dropping Uber Eats. While most of the canceled orders are reimbursed, Powell says some aren’t. The kitchen, she says, turns around orders as soon as they come in over the Uber Eats tablet instead of waiting for a driver to be confirmed, since keeping a customer or a driver waiting can lead to a bad rating. If the order is canceled too quickly or before it’s matched with a driver, it may not be automatically reimbursed. “Why wouldn’t you match it with a driver before you send it to me to make the order?” she asks. She says she has emailed customer service to try to fix the problem but has received a standard response letting her know canceled meals will be reimbursed. Powell isn’t fond of the food waste inherent in the system, either. “Even though they pay for the food, we’re not really in the business of making food to throw it away.”

…Wolf Dawg is also using DoorDash, another delivery newcomer to the county. It charges a monthly fee for equipment (a tablet and optional printer for less than $20) and a slimmer 25 percent of delivery sales. Wolfe was an early adopter and feels the service’s direct deposit makes for a streamlined process. “I don’t know if it’s 25 percent of my income nice,” she says.

A few restaurant owners the Journal contacted were surprised to have DoorDash drivers show up with company credit cards to pick up deliveries, given that their businesses hadn’t signed on with the service. With a fee and tip going to the driver, and no charge to the restaurant, DoorDash’s profit was a bit of a mystery. Powell says she noticed DoorDash orders, too, before a representative called to say its free trial period was over and offer a pitch for becoming a partner. That pitch included the total DoorDash sales recorded at the restaurant and information on the benefits accompanying that 25 percent fee. No such thing as free delivery after all.


Leave a comment

Your email address will not be published. Required fields are marked *