Delivery fees create a war in the restaurant industry

Future. DoorDash and Uber Eats were thought of as temporary lifelines during the pandemic, but consumers aren’t letting go of the convenience. At the same time, delivery fees are returning to pre-pandemic levels. Some restaurants are wondering if they can survive the “new normal.”

Doorstepification
In a recent survey, 71% of consumers said they’re going to continue to order for delivery as much as they did during the pandemic.

• DoorDash’s order volume in reopened markets has slipped 20%.
• Uber Eats saw a dip, as well… but its revenue grew 230% in Q1 2021.
• In SF, one restaurant owner said that DoorDash orders are remaining steady.
• Some high-end restaurants say they want to keep deliveries as an option.
• In the first quarter of 2021, DoorDash processed 329 million orders (a 219% increase from the previous year).

Pandemic-era delivery is mostly here to stay.

Is it affordable?
The difference is often minimal for customers, but delivery companies charge hefty fees to restaurants. During the pandemic, emergency caps kept the fees down. But those are set to expire.

• San Francisco’s board of supervisors voted for a 15% cap on delivery fees.

But caps in states like New Jersey forced Uber Eats to charge customers a “temporary local fee.” Will additional cities have caps? Unless caps are normalized, it could become unaffordable to deliver. The customer is going to have to pay a premium.

Convenience
Restaurants are also aware of the fact that once customers are accustomed to convenience, they rarely want to give it up. So customers will likely keep paying for the service.

Pickup orders and deliveries aren’t going back to pre-pandemic levels (not yet, at least). The only question is if businesses, delivery companies, and customers are going to go to war over delivery fees, and whether local governments will step in.