Grubhub, DoorDash and Others Deliver Restaurant Meals to Customers’ Homes and Offices

Apps that enable users to order restaurant meals for home delivery are now popular in cities around the world. Users create accounts on these apps, with payment card information as well as home address. Nearby restaurants appear on the smartphone app including complete menu information. Users make their choices; the app sends the order to the selected restaurant and dispatches a delivery courier. Delivery fees and driver/courier tips are added to the price of the food and charged to the credit card, PayPal or digital wallet account on file. Meal delivery services were a savior for many restaurants during the Coronavirus crisis. Major players in this niche include Grubhub, Seamless (which is part of Grubhub), DoorDash and Uber Eats in the U.S.; Delivery Hero and Takeaway.com in the EU; Just Eat in the U.K. and Deliveroo in the U.K, the EU, Asia and Australia. Uber’s meal delivery unit saw soaring growth during the Coronavirus, helping to offset a decline in its traditional car service.

Restaurants pay very substantial fees, usually about 15% to 30% of the total per order to the meal delivery firms. Some restaurants may elect to hire their own dedicated drivers, but this can be challenging to manage, and a well-run system would include the cost and effort of implementing order-taking technology along with hiring delivery drivers. At least 25% to 30% of a restaurant’s orders need to be for delivery in order to cover the expense, according to analysts at Boston Consulting Group. Many restaurants are opting to outsource deliveries to firms such as Grubhub, DoorDash and Uber Eats. Often, these restaurants raise their prices on meals sold through the apps in order to recoup the costs.

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