Not all heroes wear capes...some don casual clothing, drive their cars to pick up food from the restaurant of your choice, and deliver it to your door at a minimal fee. Gone are the days of food delivery being limited to just Chinese food and pizza. With apps such as GrubHub, Caviar, and Postmates, many restaurant goers have the ability to simply kick back at home after a long day at work and have food delivered to their doorstep.

But the big question at hand still remains: is the convenience of food delivery worth the price? Most restaurants have a delivery fee from $2 to $5+. In addition, there is the service fee that the app may charge too. At that point, is it more cost effective to simply walk, bike, drive, or take public transportation to the restaurant instead of spending additional funds for someone to deliver food to you? I’d say so.

The winners in this situation are the apps themselves. An article in Tribeca Citizen details just how complex the situation is for restaurants to make a name for themselves--or even stay relevant! Many of these restaurants give up to 30% of their revenues to these food delivery app companies. Given the tight margins in their business, who knows how long they’ll be able to keep that up!

This snippet, taken from the aforementioned article, is just the tip of the iceberg:

 “Seamless (a.k.a. GrubHub) takes a percentage, not a flat fee, of the total food and beverage amount, even though its involvement is the same whether an order is for $10 or $250. (In April of 2014, under pressure from the New York Attorney General, Seamless agreed to stop including gratuity and tax.) Restaurants can choose from four commission levels (12.5%, 15%, 17.5%, and 20%); the more a restaurant pays, the higher up it will appear in the search results” (Tribeca Citizen).

Looking on the bright side, these food delivery apps employ people looking for a side hustle. Side hustles, which are described as temporary, median-paying jobs, have become a fast growing trend that allow people to earn extra money in addition to any other income they might have. So what’s the real cost of convenience? As great as it is to be a consumer in a time where instant gratification is just a few taps away on an app, this new phenomenon is costing some restaurants more than they bargained for.

Questions:

• How much do you spend on food delivery services each week?
• What are some strategies you can implement in your life to be more mindful of your spending?
• If you had a car and the time to do so, would you ever consider delivering food as a side hustle? Why or why not?
• Now that you know more about how these food delivery apps operate, are you more or less likely to use them when ordering out? Do you feel neutral about it? Explain.

-----------------------

• If you liked this article, check out this short video on the real cost of convenience! You might be surprised how the costs add up!
• In addition, be sure to check out this NGPF case study on budgeting to get a more in-depth sense on how to spend your money wisely!

Picture credit: https://www.linkedin.com/pulse/food-delivery-supply-chain-optimization-why-most-alvis-lazarus

About the Author

Danielle Bautista

Danielle is a native of Southern California and a recent graduate from the University of Maine, where she braved the frigid winters—a feat in and of itself—and earned her Bachelor's degree in International Affairs. She has a passion for working with non-profit organizations and serving populations in underprivileged communities. When Danielle isn't writing NGPF blog posts, spearheading various outreach projects, or managing contests and flash surveys, you can find her doing some sort of outdoor activity, learning a new hobby, or cracking what she thinks are witty puns!

More posts by Danielle