Uber Eats has Steep Costs for Restaurants

The food delivery market, once handled primarily by restaurants themselves, has gotten more and more crowded lately as both start-ups and established companies muscle their way into the fray. As the field grows, the importance of differentiating oneself is obvious – whether it’s by offering more options or fewer, a shorter delivery time or a cheaper surcharge. But one factor that’s largely invisible to the end user is the percentage these companies charge to the restaurant themselves.

A typical rate for standbys like GrubHub and Seamless falls in between 10 and 15 percent, while others (like Caviar), charge nothing to the restaurant and make their profit entirely from delivery fees paid by the customer. Uber Eats, on the other hand, will be rolling out services in major cities this month at a 30% rate – even worse than the current high of 25% charged by Amazon.

It’s worth noting that, unlike GrubHub and Seamless (who do not supply their own delivery people), Uber and Amazon offer a more complete service to restaurants. Beyond the interface they offer, the delivery itself is taken care of, not to mention promotional assistance and photographers. To some, these services and the exposure they provide more than justify the cost. But to others – particularly those with lower profit margins per-item to begin with – Uber Eats is simply out of reach.

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