Added ‘fees’ have been a gold mine for food delivery services – and a bane on customers. Many local jurisdictions have taken measures to control them. But a new survey reveals delivery service fees are still running wild…
UBER made history in 2021, with the first food delivery service drop to the
International Space Station. Imagine what the ‘fees’ were on THAT one…
No wonder folks are still complaining about delivery service ‘fees’. Sometimes, the fees can be equal to, or more than the cost of the food you ordered…
Eye-opening experiment
The survey was commissioned by CouponBirds, an online company founded in 2015, “to capitalize on the growing e-commerce and coupon markets. We focus on collecting, validating, and ranking optimal coupons, to help online shoppers save both time and money.”
The impetus for the survey was a New York Times ‘experiment’ in which the paper found, “the combined cost of UBER Eats’ various surcharges was equivalent to a 91 percent markup on the restaurant cost of a meal, the highest of any of the leading food delivery apps.”
Undeniable facts…
CouponBirds calculated the average cost of hidden fees for fast food deliveries in every state and the most populated U.S. cities. And the result was both shocking and depressing. For delivery service users, at least.
The shake-out
For each U.S. state and 164 of the most populated U.S. cities, the Birds manually collected online prices and additional ‘taxes and other fees’ for three popular fast food dishes on Uber Eats: a 6″ Garlic Roast Beef Sub from Subway, a 3 x Chick-n-Strips Meal from Chick-fil-A and a Double Quarter Pounder with Cheese Meal from McDonald’s.
With this data in hand, they calculated the average price paid in ‘taxes and other fees’ for Uber Eats orders in each state and city. Alaska was excluded from the analysis due to insufficient data, as were cities in Wyoming.
What they found
The key findings may surprise you…
- On average, Seattle has the highest hidden fees ($12.16) of any major U.S. city.
- In contrast, Toledo, Ohio, has the lowest average hidden fees ($2.13) of any city.
- On average, Washington ($7.80) and California ($6.42) have the highest hidden fees of all the states.
- Delaware ($2.31) has the lowest average hidden fees of any state.
Extenuating circumstances
Seattle came out excessively high on hidden fees for a special reason. A new Seattle bylaw implemented in January 2024 requires gig workers like delivery drivers to receive a minimum wage, to which UBER has responded by adding a ‘Local Operating Fee’ of five dollars per order and upping its service fees.
In Maryland, legislators are considering imposing a 50-cent ‘road impact’ fee on rideshare trips and food deliveries.
And in Oregon, there’s no sales tax, so service fees make up 96 percent of the hidden fees.
The broader view
CouponBirds puts American delivery service ordering in a global perspective; “A study by YouGov found that 21 percent of people in the U.S. order takeout several times a month. We’re not the world’s biggest fans of ordering in (looking at you, Taiwan and Thailand), but when the average cost of an Uber Eats delivery in America is $33.94, you can see how our taste for takeout affects our wallets.”
My take
What started as a convenient and ‘safe’ way to get restaurant food during the COVID crisis has become a huge global industry. And its operating costs – which are passed on to consumers – have increased with the size of their operations.
Not to mention local regulations such those in Seattle, Oregon and Maryland. There will only be more of those in future, at all levels of government, once other jurisdictions take note of the revenue opportunities.
Well… COVID is over. We’re all free to go where we want and buy what we want and eat what we want. Nevertheless… It’s amazing how much appeal the ‘convenience’ factor still has to folks who can afford delivery services. And the hold it has over folks who’ve just kept on using the services, even after the crisis was over. And who have now incorporated the delivery ‘habit’ into their lifestyles.
I’m not one of them. Call me old-school. But I’ve always believed it’s crazy to pay someone else to do something I’m capable of doing myself. And it saves me piles of cash!
~ Maggie J.