This is really interesting because if you have autonmous drivers, DoorDash doesnt really have a lever to lower prices except removing tipping.
Eg. Papad = $0.49 each directly from my local Indian restaurants site (they sell by the single), Doordash gives a price of $1.50 per papad.
Likewise with Naans, dips, etc. All have $1 added. Which can make a $10 lunch ~ $25.
I believe it's Doordash doing this. What gets really weird is Uber Eats and Grubhub seem to match prices and charge exactly the same as Doordash.
For anyone to repeat this. Look up your local indian places actual menu. You'll likely need to use Google images for the name of the restaurant to find an actual picture of a physical menu. Now look up any of the online services, they all seem to price match each other and they'll all have doubled prices for things like naan or roti.
Restaurants set the menu prices higher on delivery platforms to recoup the money lost in fees. They also pay fees to DoorDash, Uber, etc...
https://www.ftc.gov/advice-guidance/competition-guidance/gui...
Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor.
When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices.The UberEats/Doordashes/etc of the world all charge pretty high fees so this is one way the restaurants can recoup some of that.
Also, I spend way too much time pricing out Doordash vs Official App (normally using Doordash for delivery) vs Pickup just to see what the spread is.
> The UberEats/Doordashes/etc of the world all charge pretty high fees so this is one way the restaurants can recoup some of that.
Are you blaming the restaurants or the ride share services? I can't tell...
It’s all a shell games so that they can say “free delivery” and/or not have to call out “this item is $5 but you will pay a 20% more to get it delivered through DoorDash”. They just hide that “fee” in the item price.
It sounds like the direct increase to the consumer's prices is done by the restaurant itself, but the reason the restaurant is charging higher prices are to make up for the fees they're charged by UE/DD.
In other words, UE/DD restaurant-side service fees eat into the restaurant's profit margins, so the restaurant passes on the cost increases to the consumer to get them back.
To be clear, no idea about how closely these statements correspond to the world, just that this seems to be OP's claim.
In my area, an &Pizza is $12 on their App, $19 on Doordash (delivery or pickup). A Chipotle burrito is $9.50 vs $12.35 on doordash delivery (plus every addon is a $1 more expensive).
You can easily pay an extra $4/$5 (30%) per item you order on there.
While that’s what you prefer, the market (most other users, including whale spenders) doesn’t care to know the actual cost.
That is what large corporations want and in the US especially they are the ones that write the laws.
But those online retailers are supplied by the same distributor who is supplied by the same manufacturer.
- ManufacturerA -> (Amazon|Walmart) -> Customer
- RestaurantA -> (Pickup|Doordash|Uber) -> Customer
> I'd prefer the overhead to show up as its own line item, rather than obscuring the actual cost of the service.
Me too. Especially that they already ALSO add a service fee in many (most?) locales, in addition to the delivery fee and the tip.
- Item priced 30% higher
- Delivery fee
- Service fee
- Tip
There is another analog for this, too, though: some retailers indeed would have more or less expensive prices for the same thing when ordering online versus in-store. I think the argument that it isn't unprecedented is pretty solid.
Despite not being entirely unprecedented, I'd still prefer to see this practice ended for food delivery services so it is easier to see the actual true overhead of food delivery services. It really does feel a bit manipulative the way it is right now.
I’d be very curious what the conversation is between them. I highly doubt DoorDash negotiates with every restaurant on their platform and wouldn’t be surprised to discover they just tack it on independently. I could see that raising some interesting questions.
All of this is predicated on “ifs” and assumptions, so feel free to throw it out. Just kind of musing here lol
That is not correct. Doordash takes a 20-30% commission on each sale, so businesses preemptively increase the prices to offset that. They're not forced to and doordash isn't doing it for them. But, you know, they're still effectively "forced" to if their in-store prices don't have great margins to begin with...
Customers are cheap and they're (partly) to blame. My theory is that Amazon conditioned people to view delivery as a free commodity and pizza places who had delivery baked into their model cemented it.
So if Doordash listed a delivery fee that covered their true cost of delivery, customers would balk. So they instead have to find creative ways to get enough. Maybe it's changed and Doordash cracked the secret, but when I'd looked into it years ago these companies barely got by — many of them actually losing money.
One could argue it's best for the consumer to very clearly understand how much more they're paying. If not a service fee, here is our aggregate food markup, in plain sight. Transparency, in other words. Let's not borrow any ideas from the healthcare system.
Isn't this basically impossible to do legally in the U.S.? Wouldn't you run into trouble both with IP law and food safety laws around reselling prepared foods?
If it's illegal nobody cares.
Food safety? There might be some restrictions related to food handling, but to my understanding they're mostly pretty rote food handling safety training stuff that I'd hope delivery companies provide anyway.
It's called the First-Sale Doctrine: https://en.wikipedia.org/wiki/First-sale_doctrine
I can't count how many friends I have had to explain this to who don't understand they are paying 20-30% more even after getting "free delivery" than if they just ordered directly through the restaurant.
I'm not sure how UberEats/etc handle it but it's absolutely crazy how much of a markup there is to order through Doordash vs going to pick it up when you factor in Restaurant Upcharge + Doordash Fees + Tip. It's easy to have an $8 item suddenly cost $20 or more total out-of-pocket when all is said and done.