Ultimate Guide to Restaurant Delivery Services – UberEats, GrubHub, PostMates and DoorDash
Getting food delivered provides ease for your customer and increases loyalty.
Restaurant food delivery sales are expected to generate at least $200 billion by 2025, but it can be difficult to find an apples-to-apples comparison of their fees. The comparison below helps to evaluate the true costs of using GrubHub (including Seamless, Eats24, Tapingo, and LevelUp), UberEats, PostMates, and DoorDash (including Caviar and Mercato).
Every fee is identified below, under every guise and variant name. Special attention is given to restaurant owners’ fees.
Restaurants increasingly rely on third-party delivery businesses to drive revenue and increase sales. For restaurants and customers alike, these delivery service platforms may appear similar. However, once you get into the details, you will find that they have different policies and prices. It can be difficult to do an exact price comparison.
In this article, we look at a restaurant delivery option price comparison for both customers and restaurants. This should help you sort out your options and decide where to throw your loyalty.
While there is no easy answer on which service to choose, you do want to look at the complete picture when making a decision. Do not be mislead by cheap service fees, when “other” fees more than make up the difference.
As the restaurant delivery arena increases exponentially, delivery services are in a mad-dash to beat the competition and lock in customers and restaurants. (tweet this)
Disclaimer: Third party delivery services change their fee structures regularly. Please check with each provider directly for its latest fee structure.
Let’s uncover what it really costs to use UberEats, PostMates, GrubHub, or DoorDash.
Restaurant Fees to Join Food Delivery Service
- UberEats charges restaurant merchants a fee percentage of 30% for each item sold via the UberEats App through the Marketplace Sales Channel.
- They charge restaurants a fee percentage of 15% for each item sold via the UberEats App through the Non-Delivery Sales Channel (this last one is waived as of March 16, 2020 until further notice due to the pandemic).
- Their regular one-time activation fee is $350, but they are waiving it during the COVID-19 pandemic.
- UberEats does collect a service fee, which is calculated as a percentage of a restaurant’s sales on UberEats. The agreed upon service fee is the fee UberEats charges restaurants to help cover costs including, without limitation, credit card fees, support, and much more.
- Postmates charges a commission between 15-30% or orders.
- If restaurants want to utilize direct bank deposit, the fee is 0.80% up to a maximum $5.00.
- Tablet and hardware rentals are $5/month.
- If you are a Postmates Partner, you don’t incur Credit Card Processing Fees. All orders are processed through an electronic ordering app on a tablet which is given to Partners for free. This means Partners save 3-6% on credit card processing fees.
- The base commission rate for GrubHub orders is 10% plus a processing fee of 3.05% + $0.30.
- There is no activation fee.
- In order to make sure your listing is seen within GrubHub’s app, restaurants may need to pay an extra 20% or more in “marketing commission” for that to happen.
- The payment processing fee is $0.30.
- The restaurant often splits the delivery fee by paying up to an additional 4% of order total, for a total of 34% of the order.
- Typical tablet and hardware rentals can cost $119/month.
- DoorDash takes no commission for 30 days. Thereafter, a commission of 30% is taken from orders.
- The activation fee is $0.
- The marketing commission is 20%.
- When it comes to tablet and hardware rental, it’s a free trial for 30 days, and then $6/month.
- There may also be “other” fees with DoorDash, including a revenue share as high as 30%.
Current Valuations of Food Delivery Services
A company’s market capitalization or “valuation” provides a quick way to understand its size. The larger the valuation, the more important the company is.
For example, the valuation of all Cheesecake Factory locations is about $1 billion. In comparison, the valuation of all Potbelly sandwich shops is about $50 million. A company’s valuation allows anyone to quickly estimate the importance of any business. In this example, the U.S. market values Cheesecake Factory at roughly 20 times the worth of Potbelly sandwich shops, nationwide.
Note: Because many of these companies are privately owned, the following valuation figures are approximate, estimated based on the last funding round, and could vary substantially based on day-to-day market forces.
UberEats: $20 billion
- With annual revenues of $4.1 billion, UberEats is by far the largest U.S. food delivery app. Growing more than 200% over last year and adding new users daily, analysts forecast UberEats to maintain its commanding market share.
- Note: UberEats (approximate valuation: $20 billion) is a subsidiary of Uber (valuation: $56 billion).
DoorDash: $16 billion
- With an annual revenue of $1 billion, DoorDash and its subsidiaries (Caviar and Mercato) are the only food delivery service besides UberEats to show triple-digit annual growth.
GrubHub: $6 billion
- With an annual revenue of $4 billion, GrubHub and its subsidiaries (Seamless, Eats24, Tapingo, and LevelUp) are the most popular delivery service in the northeast U.S., especially in Boston and New York.
Postmates: $2.4 billion
- With annual revenues of $1.8 billion, Postmates completes more than five million deliveries per month, and this food delivery service is adding new cities each year.
Service Fees for Customers
- The service fee for customers equals 15% of the order total. This fee doesn’t apply to any restaurants that deliver their own orders.
- For subscription customers on the UberEats Pass (monthly subscription), there generally isn’t a service fee.
- The service fee for customers is a variable percentage based fee based on the dollar amount of food ordered. It is generally capped at 20%. This fee is also waived for PostMates Unlimited customers (their monthly subscription service).
- This isn’t a straightforward fee that is plainly visible to customers. You’ll need to open the “Taxes and Fees” section of your receipt to see the charge.
- Customers may be charged a delivery fee or a service fee depending on the restaurant.
- Customers will see a service fee between $1.99 and $7.99 based on the restaurant.
Looking for a condensed price comparison? Overall, when customers ordered from these options the delivery fees fell out this way:
- For UberEats, the fees were on average 20% of the total.
- Postmates fees were on average 30% of the total.
- GrubHub fees were about 12% which is nearly half everyone else.
- DoorDash clocked in at an average of 21%.
Small Cart Fees for Customers
- Small order fees apply when a customer’s order subtotal is less than a specified amount. This fees varies by city, but it is either $2 for subtotals less than $10 or $3 for subtotals less than $15. Customers can always remove the fee by adding more items.
- There is no small cart fee for UberEats Pass customers, but customers must spend a specified amount for free delivery.
- $1.99 for orders below $12.00 ($10.00 in Los Angeles)
- For Unlimited Customers, there is no small cart fee.
- The small cart fee depends on the restaurant for GrubHub, and there isn’t one for GrubHub+ customers.
- The Small Order Fee is a fee added to customer’s orders that don’t reach a minimum subtotal. It is usually around $2. The minimum subtotal varies city to city, but it is typically around $8 – $10 to avoid the fee.
Delivery Charges for Customers
- Delivery fees vary based on each restaurant and are based on things like location and availability of nearby couriers. Customers will always know before selecting a restaurant. (In 2020 for example, fees were often waived for “local” restaurants due to COVID-19).
- UberEats Pass members get free delivery and 5% off orders over $15. These benefits apply to all participating UberEats restaurants within the subscriber’s city.
- For regular Postmates orders, the delivery fee is $1.99 to $3.99 for Partner Merchants, and $5.99 to $9.99 for all other merchants. Partner merchants have a green check mark next to their name in the app so that customers can recognize this.
- For Partner Merchants and the non-Unlimited customer, the Postmates delivery fee is $0.99–$3.99 for Partner Merchants and $5.99–$9.99 for all other merchants. Additionally, a variable percentage-based service fee is applied to the purchase price of items. Both fees are shown to the customer for review at checkout.
- For Postmates Unlimited Customers ordering from Partner Merchants, they get free delivery on every order over $12 for $9.99 a month or $99.99 annually.
- The delivery fee is usually less than $7, although delivery fees on the platform can range from $0 to $10. GrubHub often offers free delivery promos.
- For GrubHub+ members, for $9.99 a month, they get unlimited free delivery from 100,000 participating restaurants and 10% cashback on orders.
- DoorDash’s delivery fee is usually $5.99.
- Customers can subscribe to the DashPass for a $9.99/month subscription fee and get free delivery and reduced service fees when they order $15 or more from any DashPass eligible restaurant.
One of the most popular delivery services, Uber Eats sets the industry bar for delivery.
Final Thoughts on the Price Comparison
Which restaurant delivery option is best for the customer, and how can you make an informed price comparison? That requires a deep dive into the costs on each app.
The Customer’s Cost
A majority of the time, customers pay less on GrubHub for the exact same meal found elsewhere. This is because there often isn’t a service fee. Yet, with the rise in delivery services partnering exclusively with partner merchants, it is getting harder to put an exact number on pricing. On the other end of the line, Postmates is generally more expensive.
So, how is a customer to know which delivery option will provide the lowest prices? A customer could download each app and create the order across each platform to see, but that is time consuming.
Or customers can check with relatively new apps which allow customers to compare prices across the platforms mentioned in this article. A customer simply needs to enter the restaurant into the app, which then lists all the food delivery services that the restaurant offers in order from cheapest to most expensive. Customers can also see information including the restaurant’s rating, menu, and pictures. There are many food delivery comparison apps of varying quality in most app stores.
The Restaurant’s Cost
Which restaurant delivery service is best for the restaurant? It pays to do your research and a price comparison that is unique to your restaurant. See what kind of deal you can work out with each one, and if it is in your city.
Then, as a restaurant, you have data at hand to choose your option, or you can choose several if it works with your marketing strategy.
In the end, it’s going to matter to consumers if the restaurant they’re looking for is on the app. For restaurants, it’s going to come down to cost and service.
The race to be the best restaurant delivery option is on, and with fierce competition, look for some pricing shake-ups and specials in the future. (tweet this)
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Images: Photos by Erik Mclean and Robert Anasch on Unsplash