Food Delivery Service Comparisons: They are Bleeding You
How can Grubhub lose money when they charge you so much?
11/24/20249 min read
My Drawerful of Menus
Like most New Yorkers, I’ve had a lot of food delivered over the years. Some of the reasons are work, kids, laziness, and simplicity. Before the services existed, I collected a drawerful of paper menus, and would call a place for delivery, hoping that the place would (a) get the order right and (b) deliver to the right place. Seamless (the first delivery service in the city and grubhub’s original name) was a godsend. No more pidgin spanish: “calle ocho uno”. Better yet, no actually needing to talk to people, which I have to say is a draw. Call me antisocial.
Grubhub was also a relative bargain – low or next to no fees. Eventually they had to turn into a real business though, I guess. I’ve noticed huge inflation of their fees in the last five years. Sometimes they disguise it by breaking it into different line items – service fee not to be confused with delivery fee which should not be confused with the support local fee. Two of the outfits will try to confuse you by bundling their fee with taxes, as if you wouldn’t notice that your taxes sure ain’t 25% or more.
I’ve rung up a sample (but kinda real) delivery order from Laly’s, our favorite Mexican place in Jackson Heights, and ran it through four of the services, and present the results to you. An educated consumer is our best customer, etc.
Starting with Grubhub (aka Seamless), the original NYC delivery service, you can see that I theoretically have $5.94 in savings due to a membership in grubhub+, which costs $9.99 a month. That means I need two deliveries a month to come out even, which I think I still can rationalize. Tip: I just went to cancel this membership on the website, and the site immediately offered me a $15 credit (on the next billing cycle) to stay subscribed. Time will tell how often I can get a similar credit.
Grubhub breaks their fee into a delivery fee and a service fee and gives you a pre-tip subtotal. You won’t see the total until the next screen when you hit the checkout button. This is surely engineered based on behavioral studies – if they showed the full amount here, more people would back out. Showing the total at the last second, without the breakdown into what makes it up, and you are more likely to just say “fuck it” and go ahead.
So my Grubhub order (nachos, steak tacos, fish tacos, a cobb salad with grilled chicken, and a cuban sandwich), ends up at $90.31 pre-tip, which would put me at $105.31 after tip. That said, the correct comparitive amount is $111.25, adding the so-called savings from grubhub+.
Now get a load of Laly’s menu:
I’ve highlighted in red the items ordered, and you’ll notice that almost every item is $1 more when ordered through Grubhub, except for the salad with chicken, which is $3 more. The food is marked up $7 over the restaurant menu. If I ordered through Laly’s directly, the total of the food, with tax and identical tip comes to $93.39, $17.86 less than Grubhub (over 16%). I think I need be calling Laly’s directly from here on out!
Moving on to Doordash, their food is marked up $5 ($1 per item). Their gimmick seems to be claiming there is no charge for delivery, but bundling in their fee into the same line item as tax. I mean really.
I’ve highlighted in red the items ordered, and you’ll notice that almost every item is $1 more when ordered through Grubhub, except for the salad with chicken, which is $3 more. The food is marked up $7 over the restaurant menu. If I ordered through Laly’s directly, the total of the food, with tax and identical tip comes to $93.39, $17.86 less than Grubhub (over 16%). I think I need be calling Laly’s directly from here on out!
Moving on to Doordash, their food is marked up $5 ($1 per item). Their gimmick seems to be claiming there is no charge for delivery, but bundling in their fee into the same line item as tax. I mean really.
Then they add some bullshit complaining about New York’s law, which was put in place to address the misbehavior of the delivery services. If you’re interested, the bottom line seems to be that delivery services have to pay $19.56 per hour (increasing annually) during deliveries. Of course there’s nothing in the law that dictates the nonsense text about not being able to tip prior to assignment to a courier.
The post-tip total for Doordash is $112.37, $18.98 (over 17%) more than ordering directly from Laly’s. Over a buck more than Grubhub, and if the salad pricing on Grubhub was a mistake, Doordash would be $3 more.
Uber Eats has always come in last in my book, and the below comparison validates my view. The post-tip total for Uber Eats is $115.56, $22.27 (over 19%) more than a direct order, and more than four bucks over Grubhub.
Uber Eats does the same nonsense with a minor 49-cent delivery fee but buries all their not-so-minor charges commingled with taxes. The best bit is they give you an option to pay another $1.50 so your food has a chance of getting to you hot, as they would otherwise schedule multiple pickups and dropoffs for your courier. Yeah, no.
Finally, I was only vaguely aware of a service called Chownow, which I had downloaded and ordered from once, but cannot remember for the life of me. There are relatively few (but still some) restaurants on this app in my neighborhood. Their stated goals are give more back to the underlying restaurant. Sounds good.
Chownow breaks out their fee as a delivery fee and a “support local” fee, a.k.a. their cut. At least they break out the taxes standalone. The food prices are less than on the restaurant menu, which leads me to believe that Laly’s set up the app years ago, and hasn’t bothered updating it for inflation because no one is using this service. With tip, their total is $97.85, just four and a half bucks over the restaurant directly. Even if the menu prices were adjusted up $5-$10, they’d still be less than Grubhub, the cheapest of the major services.
So where do I go from here? I bet most restaurants have ditched their own delivery guys since the apps are overwhelmingly the more popular route. I don’t know this, I am just speculating. Likely I will, in order (a) see if a restaurant is on chownow, (b) call directly if I there’s a good chance of english being spoken, and (c) use Grubhub when I can stomach paying $20 for the experience, or we’re on the road on our way home and can’t deal.
Just like Uber, these services started out as a good deal, and they sure aren’t anymore. Except Chownow, still in their own growth phase. Caveat emptor, and all that!
