Fri. Mar 1st, 2024

Food delivery services are very popular. They allow you to quickly receive ready-made meals, grocery and even convenience store products. But this practicality comes at a cost: it can increase the initial price of a product by 80%, according to an estimate from L'église.

Delivery apps: practical but expensive

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Food delivery services are very popular.

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Millions of Canadians use these delivery services daily, especially the three giants: Uber Eats, SkipTheDishes and DoorDash.

Uber Eats claims 88 million users worldwide. DoorDash, over 32 million. Even the smallest Canadian player, SkipTheDishes (from Winnipeg), raked in revenues of more than $600 million in 2021.

Consumers aren't watching not necessarily the invoice details. And yet: it climbs quickly. Very quickly.

It's fast, it's efficient, it's convenient. The interfaces are relatively fluid, it tells us roughly when it's going to happen. So, we have instantaneous consumption which is effective, which meets a consumer need, explains Paul-Antoine Jetté, chartered professional accountant (CPA), who analyzed this phenomenon.

Instantaneity that comes at a price: delivery companies charge both the consumer for service fees, delivery fees and the tip, and the restaurant owner for order processing fees.

Very often, the restaurateur will pass these costs on to the consumer by selling his item more expensively on delivery than at the counter.

An example: that of the famous McDonald's Big Mac trio. It costs $11.19 at the counter. In apps, the base price is already on the rise, at $13.79. Once delivered, its price almost doubled.

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The restaurateur has additional costs associated with this service. There is no magic in life: the goal of a restaurateur is to make a profit. If we add costs, he will want to adjust his menu price chart accordingly, explains Paul-Antoine Jetté.

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Delivery apps add several fees, which increases the bill amount.

The young fans that the The grocery store teammet are aware of the costs associated with these services. And recognize that this practicality comes at a cost. However, one of those people, Simone, recently deleted the app she was using, realizing that she may have been ordering too often.

I live downtown. There are plenty of options around me. I'm going to walk to get some food. It's better for my wallet and my physical health.

A quote from Simone

Ease means risk, notes Paul-Antoine Jetté, because you could quickly lose control of your credit card . If you pay on time, there is no interest, that's true, but you have to pay the entire account balance on time. All purchases that are overdue begin to accrue interest.

Explanation of fees

Uber Eats

Delivery fees: vary depending on location and availability of delivery drivers

Service fee: restaurants and convenience stores, 10% of subtotal, minimum of $2 and maximum from $4/Groceries: 13% of subtotal, $5 to $15/Liquor: 20% of subtotal, $5 to $15

DoorDash

Not specified. Vary depending on businesses and demand. Possibility to pay more if the order is of small value and/or if the demand is high.

SkipTheDishes

According to the company's website: The service fee is a percentage of your order subtotal. The service fees applicable to your order may vary depending on a number of factors, including the business you have chosen and the value of the items in your order. The exact amount will be indicated on your receipt upon payment.

Please note that taxes apply to both food and fees delivery and service. To this total applies the tip, which is often set at 20%.

Obviously, the bigger the bill, the higher the tip. And yet, as Paul-Antoine Jetté points out, the cost price of delivering a $15 dish is the same as for a $100 dish: same hourly rate for the delivery person, same mileage, same gas expenses.

The tip is very important, says Marc-André Gagnon, a deliveryman who works for the three platforms. He notes that the higher the tip, the more the customer will be put in touch with a delivery person, who will therefore pick up the order more quickly, and deliver it… sooner than if the tip had been lower.

As in the case of Uber taxis, the platforms use a form of dynamic pricing.

This is the principle by which the price is modified according to demand, explains Paul-Antoine Jetté. The more demand there is, the more the price rises. We can wonder if it's very ethical because, ultimately, food that costs more because the world is hungry at the same time is still a bit curious.

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Deliverer Marc-André Gagnon works for the three delivery platforms.

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Marc-André Gagnon does not necessarily see the customer's invoice he delivers. But he notices that he sometimes delivers small bags. I already delivered a medium fry. Another time, a Mr Puff and also a pot of Nutella that I picked up at Walmart.

The grocery store did the exercise: on Doordash, the jar of Nutella sold by Maxi ($5.45 the 375 g format) ultimately costs, all costs included, $14.33 upon delivery, almost triple the original price.

With the galloping inflation, however, these services may experience some decline, as according to NielsenIQ, 22% of the population says they are reducing their use of meal delivery services.

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