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Comment by rpcwork | Hacker News Reader

Nobody showed them more love than I did. Just because it felt like such a fun way to get food while still supporting the gig-workers. Until, I started noticing the huge markup on sides/entrees that I recall costing way less on the restaurant menu.

Did prices go up? Nope, it was doordash.

A side of garlic sauteed edamame is $4.75 on the restaurant menu, but $7.85 on the delivery app. $7.85 isn’t too much for a good tasting side, but I am not a fan of being lied to about pricing. Felt like getting ripped off.

It obliterates my trust in today’s delivery apps and damages the value proposition.

One wonders: How much of the revenue is coming from markup in menu prices? What happens to this revenue when the average consumer grows wise to these markups?

Re: https://www.forbes.com/sites/suzannerowankelleher/2020/02/27...

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Doordash charges the restaurants a percentage of the order, so a lot of restaurants increase their prices on Doordash to recover the cost. I've seen the same thing on other platforms. If you are ordering for pickup, it's usually a lot cheaper to order by phone or through the restaurant's website (if you can).

A sushi order I made last week would have been $77 (delivered) on Postmates. I ordered the same items from the restaurant directly and picked it up myself for $36. The restaurant is a 10-minute walk away.

This makes me skeptical of the business model. Those margins will absolutely get whittled down over time and these companies are already unprofitable.

Well... It's what - $36 for the food, $10 delivery fee, $10 Postmates fees and 20% tip on top = $68(rounded up)...

Truth is - if you're paying $36+tip for the same food delivered, you're literally enabling underpayment of the delivery person.

I tend to pick up, because I really don't want to enable abusive relationship that restaurants have with their drivers.

$77 didn't actually include a tip. The prices were high because of a large markup on Doordash prices compared to the restaurant's takeout menu, as well as the explicit fees you mentioned.

The $36 was specifically for pickup, the restaurant doesn't offer their own delivery service as far as I know.

So you guys in America pay 77$ for takeout sushi? Fascinating

Well, in the end I paid $36 for takeout sushi for two people... which is, I guess, not an unreasonable price in America. $77 is getting pretty high even for a big coastal city, although I'm sure there are people who happily pay that.

How much would it cost where you live?

Yeah, if I went to my local grocery store which has a sushi counter, for two people I'd be about $12/main + $6/side (e.g. seaweed salad or Gyoza), so ~$36 for two people. I'd generally pay more in a restaurant even for takeout.

For 2 people, expect sushi delivered to your door in SF to be $50-100 depending on how hungry you are.

Keep in mind 2 pieces of salmon belly nigiri will be $6-9 depending on the restaurant. And this excludes taxes, driver tip, delivery and service fees, etc.

I just noticed it this weekend. Side of egg rolls on Doordash is $10, additional egg roll $2. On menu $6.50 and additional egg roll $1. When I noticed that, I immediately removed the order and called the restaurant directly.

The markups for ordering through doordash are ridiculous. I can afford to pay $25 for a burrito, but I'm not going to do that. That's a ridiculous price for being lazy/greedy.

$12 for some egg rolls is just way too much!! Oof.

My first thought was that's like Monster Cable margins.

On the other hand... the materials cost of an egg roll in quantity 10 is $0.51 based no some research I just did. In general a restaurant should expect to price a menu item at 4X food cost, so right around the $2.00 mark.

And when I’m sitting at a restaurant table enjoying at least decent service and atmosphere I don’t even bother to price out the difference because its paying for and different product. But grocery vs delivery its much more relevant.

Did you have it delivered for "free"?

Can you calculate how much the delivery person got out of that trip?

Yeah I go to order a burrito at a local cheap burrito place and it no longer is a "cheap burrito place", then I have to add on the extra fees from DoorDash. It is annoying to me that these delivery companies will take around 30% of the cut from the restaurant, and then also are taking fees from me. Pick one, but don't screw over both sides. I want to support local, but sometimes they are too far for me to be able to get versus a big chain. So I'd like to order delivery, but at the same time I don't feel like it is supporting them when a massive cut is taken out of their profit.

I don’t understand how taking a fee for a service which both sides agree to can possibly be ‘screwing them over’.

Because they act like they support local businesses but then take a 30% cut out of their profit despite not doing anything remotely close to justifying that price.

This forces local small places to have to raise their costs whereas the big chains cut deals with these platforms and don't have to raise their prices as their cut is much smaller.

So now if I want to buy local I am paying more for the food than I would if I went into the place. But that doesn't even then account for me having to also pay a delivery fee and a service fee. Oh and if my order is under $12? They'll slap a "small order fee" on. If I am already paying a fee to use the service on every single order, then why is the restaurant still getting screwed out of 30%? I just paid the company a fee for the service. That service fee and that cut from the restaurant is not going to the person doing the delivery work. I'm already paying for that in the delivery fee and tip.

> despite not doing anything remotely close to justifying that price

What ever justifies a price apart from what people are willing to pay?

If the restaurants are willing to pay their part and the consumer is willing to pay their part, then the price is right. If anyone was getting 'screwed' and the price wasn't worth it they'd walk away. We're talking delivery of junk food here as well - it's not like it's an essential service.

For some people delivery is quite useful and essential in their lives and gives them some independence. During some of the lockdowns in Canada drive-thru and delivery were some of the only options for getting food. And places without a drive-thru were forced to rely a lot on delivery apps.

Unfortunately you'd think it is a choice, but in today's day in age a restaurant cannot afford to skip being on the delivery apps. People are lazy and are likely to just not order from a place if they don't see it on a delivery app. No one I have talked to has ever been happy with the way the apps work. However part of the problem is that most people don't know how much these apps are screwing over the restaurant. I have talked to people who were happy to have so many options of local places on these delivery apps and were happy to be able to support them. But they did not even know that these companies were taking such a huge cut of the money that it meant those local companies often weren't making profit on the orders at all.

Even various leaders in different provinces were making statements publicly asking food delivery companies to not be greedy and to lower fees: https://mobilesyrup.com/2020/10/16/premier-ford-food-deliver...

I work at a restaurant with door dash and grub hub. Unless there is something I have missed about doordash raising the prices, it’s the restaurants who are raising their delivery prices to stay profitable right now. Where I work every menu item has a .50$ to 1.50$ markup for delivery to make up for the some of what delivery services take from the restaurant.

I wish I could be more specific but I’m just working here while in school. I don’t really know the full detail of what doordash charges us.

Sushi restaurant I just ordered from paid 15% to DoorDash.

It really depends on what the restaurant wants to do.

If a restaurant is just present to get existing customer orders - then they pay little, but if they want to expand their user base... marketing isn't free.

> A side of garlic sauteed edamame is $4.75 on the restaurant menu, but $7.85 on the delivery app. $7.85 isn’t too much for a good tasting side, but I am not a fan of being lied to about pricing. Felt like getting ripped off.

p100 of the S1 explains their business model. DoorDash charges both the consumer and the merchant based on the order amount.

That is literally how all major services operate.

This is the part that makes me bitter about doordash. The fee's, tip, yearly subscription – all fine. Marking up random entree's $3-10 is when I get frustrated. It's criminal imo.

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