How Delivery Costs Bleed Both Restaurants and Diners

At Spice Waala in Capitol Hill, the menu price for a chicken tikka roll is $7. And the Indian nachos known as papdi chaat costs $5. But order those same items from an online delivery service like DoorDash or UberEats and you’ll pay a dollar more for each. Why is that? While the restaurant gets more business from having a presence on those apps, the companies charge commissions that take a chunk out of Spice Waala’s revenue, forcing them to raise prices to make any money. And for the convenience of not having to go any further than your front door to get dinner, you’ll spend almost twice as much as you would have otherwise. Delivery costs may help the bottom line for DoorDash and UberEats, but they sure aren’t good for either diners or restaurants.

In an interview Spice Waala owner Uttam Mukherjee gave with KIRO radio, he explained that up until a year ago, the delivery apps took a cut of 25 to 33 percent of the restaurant’s sales. But in April 2020, aiming to help establishments that could not open for dine-in service, Mayor Jenny Durkan introduced a citywide emergency order capping those third-party fees at 15 percent. (Governor Jay Inslee issued a similar statewide order in November.)

But the delivery companies simply adjusted by charging consumers more. Now, in addition to seeing higher menu prices on DoorDash, you’ll pay an extra $2.50 local fee, as well as a 17 percent service fee that’s bundled into the line item for taxes (misleadingly, in my opinion). So your $12 order from Spice Waala (which, by the way, includes taxes in the menu price), will become $20.78 before tip, a delivery costs increase of 73 percent.

Ordering from UberEats is even worse. You’ll see a similar $2.50 local fee, along with a 15 percent service charge and a $1.49 delivery fee. So your $12 order through that app will come to a whopping $21.89, an 82 percent increase.

The easiest way to help restaurants as well as your dining budget is to order your food for pickup, not delivery. But be careful if you use a third-party service instead of going through the restaurant directly. It’s possible to order the same Spice Waala food for pickup through UberEats, but you’ll pay the higher menu prices as well as sales tax, for a total of $15.44. That’s 29 percent more than the cost of ordering direct.

Fortunately, a few new options in the Seattle delivery scene are making the situation slightly more palatable for both restaurants and diners. Many establishments are now using an online ordering system called Toast Tab, which typically charges its clients a monthly subscription cost. You can order a pair of $35 Seattle Restaurant Week meals from Ethan Stowell Restaurants and have it delivered using DoorDash drivers, but you’ll pay just a single $7.50 fee.

Other restaurants have signed up with a reservations service called Tock, which typically charges them a 3 percent commission, or 2 percent along with a monthly subscription fee. And the company is more consumer friendly as well. If you order a $22 pizza from Big Mario’s in Queen Anne, for example, you’ll pay just a $1 order fee on Tock, along with a hefty $7.41 fee for delivery, also using DoorDash drivers. (Order that same pizza through DoorDash, though, and your fees will total over $10.)

If that still seems like a lot, one way to reduce your delivery costs is to consider restaurants that operate their own service. Buy a couple plates of chicken pad Thai from 2C Thai Bistro in Lake City and it’ll cost you just $4.50 for delivery by restaurant staff, as long as you’re within three miles and spend at least $25. But make a similar order from Thai Thai Kitchen, delivered through DoorDash, and you’ll pay $8.56 in fees, over four dollars more.

It’s not always obvious which restaurants are using third-party drivers and which have their own delivery services. But going directly to the restaurant’s website should be your first step. You can also check out this Reddit thread from November for some ideas.

Or you could try out a couple of Seattle startups that are attempting to disrupt the industry with reduced delivery costs. One promising option is an app called Runner, which launched in June and doesn’t charge any fees to restaurants. Diners, however, pay a nine percent service charge. There’s also a delivery fee that’s based on the amount of time it takes a driver, who sets their own wages, to deliver your order. Order pad Thai for delivery from Thai One On through Runner and you’ll spend about $5.72 in fees, a little more than you would have paid 2C but a lot less than DoorDash charges.

Meanwhile, a startup called Swoop Belltown plans to offer an unlimited delivery service using electric vehicles, with no commissions for businesses in the area and subscriptions that will cost neighborhood residents $19 per month. If you live in Belltown and frequently order from local restaurants, that could work out to be a great deal.

With many Seattle restaurants struggling, ordering takeout continues to be a great way to support local businesses. But when you use delivery apps like DoorDash and UberEats, you’ll be giving your dollars to giant corporations – while you waste money by paying them extra to get the same food.

What are your thoughts on using food delivery services in Seattle? Leave a comment and let me know!

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Delivery fees are a burden to both restaurants and diners, so picking up your own food is a better approach