How Much Are You Wasting on Third-Party Delivery Apps?

by Nate Harris

Restaurants continue fighting to remain open

The Food and Beverage industry needs help now more than ever as small business owners fight to stay open during the pandemic, which is bringing forth a barrage of difficulties for the restaurateurs. Business owners are now left wondering if third-party delivery apps are helping or hurting their bottom lines. This interactive article is meant to peel back the layers and expose all that’s at stake.

Online ordering from third-party apps is 52% more expensive

An analysis from Bloomberg Second Measure in 2021 reported that almost half (47%) of American consumers had used a third-party delivery app in February 2021, which was a 10% increase compared to one year prior. Additionally, Loup Ventures reported that the average total meal cost for a consumer when using one of these delivery apps is 52% higher compared to ordering directly from the merchant.

Front-loading commission is driving away customers

To combat the exorbitant fees these delivery apps are placing on the restaurants for their services, and in an effort to bring their customers back in the door, some restaurants have begun front-loading the commission fees into their online pricing menus. While this may initially look like an equitable solution that relieves restaurants of their financial responsibility, customers are wising up to the discrepancies in pricing and have started getting delivery from alternative businesses.  

What the future holds

This effort by restaurants to temporarily save their bottom lines may unintentionally give more power (and customers) to third-party delivery apps.

Fast casual dining is making way for delivery

According to the National Restaurant Association’s 2021 report, only half of the adult population said they plan to dine in at a restaurant or fast food place over the next several months. This information has not fallen on deaf ears, as larger restaurant footprints are beginning to shrink. At the same time the traditional restaurant footprint is shrinking, the concept of Ghost Kitchens is expanding. This new way of doing business allows restaurants to reach their customers solely through takeout and delivery.