Need lunch at the office? Don’t have time to stop at the grocery store? Feeling too tired to cook? Food delivery apps make ordering from a nearby restaurant easy. However, the cost may be higher than you think – especially for small, local restaurants and their delivery drivers.
Better Business Bureau has tips that can help you understand how delivery apps work and what you can do to support your favorite local restaurants when ordering out.
- Understand how takeout apps impact restaurants. Third-party delivery apps may seem simple – you order food, the restaurant makes it, the third-party app delivers, and you pay the fees for an additional service. But the process isn’t that straightforward. You don’t see the high commissions restaurants pay to use these services. Some delivery apps charge restaurants 20 to 30% or even more. While revenue may grow for local restaurants through these apps, their profit margin will likely shrink. It’s not a sustainable business model for most mom-and-pop eateries. In addition, some companies behind these services have been called out for deceptive sign-up tactics and questionable marketing practices that cut into restaurants’ profits even more.
- Think about delivery drivers. Delivery drivers need to be treated fairly in this arrangement, too. These gig-economy apps generally offer drivers a minimum payout for each delivery they take on. Plus, they get your tip, right? Maybe, but maybe not. In the early days, many delivery apps used tips to make up the worker’s base pay – meaning it went to line the company’s pockets instead of your driver’s. Public outcry on social media caused most companies to change that practice, but not all yielded. To ensure your driver gets their tip, research how your app handles tipping or set aside some cash instead.
- Watch your budget. If you plan your expenses with a budget, you have a specific amount allocated for food and eating out. Keep in mind that using delivery apps could cut into that budget significantly. The New York Times reports that buying a meal through a delivery app can be up to 91% more expensive than simply going to the restaurant or picking up your order.
- Look for better delivery alternatives. Delivery apps are one of many ways to get food from your favorite restaurant delivered to your doorstep. Many restaurants still employ delivery drivers. In this case, ordering directly from the restaurant will save you money and give that local business much-needed support. You can also search for delivery apps with more sustainable systems in place. Some new apps ask you (and the restaurant) to pay a flat fee, enabling restaurants to keep 100% of their profits on each order. Always check BBB.org for ratings before ordering from any new business.
- Support local restaurants when you can. Often, local restaurants feel pressured to use third-party delivery apps and up their prices to cover the additional expense. Supporting local restaurants by ordering directly from their website and picking up your food can make a huge difference for a small business. In the long run, it can help them keep their prices down, which saves you money too.
Remember the true cost of using third-party delivery apps next time you want to order in. If you don’t need a delivery, visit the restaurant in person to support a local business.
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