Beware: Food Delivery Apps May Fleece You For Double the Price

Food delivery Apps have taken over the world in recent years thanks to our lazy asses.

The convenience of getting food delivered to our doorstep after a hard day’s work does make life easy.

It was something similar for me yesterday, but this time I was in for a shock when I compared the true price and the price on the food delivery app it was using.

I always knew the food on such apps is relatively more expensive, but the extra I was charged for this time blew my mind.

Food Delivery App Order

To set some context, I live in Australia and the food I ordered was from a restaurant about 15 km from my place.

I ordered a 1/2 chicken Plate(A$ 16.5) and a Chicken Burger(A$10.5). A total of A$27 if picked directly from the restaurant.

The same order via the food delivery app cost me almost double on the app.

Price Difference On Food Delivery Apps

The price difference is crazy, also you have a Delivery Fee and Service Fee applied.

The 1/2 Chicken Plate price difference is $25 – $16.5 = $8.5.

The Burger Price Difference is $16 – $10.5 = $5.5

Delivery & Service Fee = $9.9.

Total extra paid = $8.5 + $5.5 + $9.9 = $23.9.

So essentially for a $26.5 food I could have ended up paying $23.9 extra. Even after considering the $15 first-time order discount, the cost is still more than the actual food. Also, tips are extra.

With the high cost of everything and people striving to cut costs, for the unaware, these costs could be invisible premiums they pay to get their food delivered.

Reason For Higher Price

When I discussed this with my wife, she did not believe me, so I showed her a breakdown. She said is there nobody we can complain to. So I looked up the real reason for this markup. During my research, I got to know the reason.

As per this case study from the US which I expect applies everywhere, the reason is commissions.

“To be specific, restaurants have to pay the commission fees. It was reported that the third-party food delivery platform charges around 20 to 25 percent of each order from those exclusive restaurants, 30 to 35 percent of each order from non-exclusive restaurants, and 3 to 8 percent from each customer self-pickup order as restaurant commission fees”

So essentially the marked-up price is not something that the food delivery app charges, but is a markup by the restaurant itself.

Over this price and the service and delivery fee, do you want to spend double the cost of actual food?

What Is The Alternative?

In most cases, we order food via food delivery apps either because the place is too far or we are too lazy. So sometimes the premium might be worth it. But the problem here is that people are unaware of the premium costs. And when we apply the discount code we often believe we are definitely getting a better deal.

The best way to approach this is to be aware of this extra cost before placing that order. I would rather pay a tip to the delivery guy, than extra to the restaurant or the food delivery app owners.

Now this extra may vary depending on the restaurant, so next time you place an order, check how much the price difference is. This information can help you save the extra costs by just driving over directly to the place for a pickup, or you can opt for a restaurant where the markup is not this high.

Essentially be aware, since saving the extra cost on food delivery does add up over time for use in more essential aspects of life.

But if you do want this comfort, and also want to make it affordable, then start monetizing your superpower. Read more about it in my blog Ignite Your Potential: Transform Your Skills into Superpowers