Joel Rodriguez at Artesano restaurant prepares food to go for the delivery app pick-ups on Feb. 8. Gabriela Hasbun/The Washington Post
DoorDash, Grubhub, and Uber Eats may be convenient, but whether they’re a winning proposition for anybody can swing on a few dollars.
The apps aren’t always transparent about who receives what share of the bill paid by customers. So The Washington Post experimented, placing identical orders on each app and then gathering receipts from all parties to see how each fared.
As tips can vary from customer to customer – from the size of the tip to give a percentage versus a flat dollar amount – The Post initially removed them to better compare the cost of the transactions. When added in later, they significantly impact driver pay.
Our unscientific experiment offers an illustration of how costs can stack up across the food delivery landscape.
“The opacity is a feature and not a bug of these systems,” said Lindsey Cameron, a management professor at the Wharton School of the University of Pennsylvania.
In an attempt to demystify and find out more about the system, unfurl the receipts below to reveal the details of every order.
THE CUSTOMERS
Earlier this year, The Post ordered chicken skewers and a side of fried plantains from Artesano, a Latin comfort food joint in San Francisco. That order costs about $22 when you pick it up from the restaurant, including a sales tax of about 9%. Dealing directly with the restaurant was by far the cheapest way to get the food.
If you want it delivered to your doorstep, you will pay substantially more. For starters, in all three apps, the customer total without tip averaged about $6 more than an in-store order. However, Artesano was running a special on DoorDash that knocked $4.14 off the order.
All three apps charged a delivery fee, ranging from 49 cents on Uber Eats to $3.99 on Grubhub. Other charges were more opaque.
Grubhub and DoorDash charged an unspecified “service fee,” for example. (Grubhub said it covers “driver-related costs.” And for DoorDash the fee helps the company operate the platform.) Uber Eats didn’t charge a service fee but did include a line item for “taxes and fees” that added up to $5.20. Uber Eats also tacked on another charge to help pay California drivers under the state’s Proposition 22 gig worker law, which mandates that drivers and delivery app couriers receive 120% of minimum wage for their “engaged time” – in this case, time fulfilling orders.
Veena Dubal, an employment law professor at the University of California College of the Law, San Francisco, said the lack of transparency could infuriate consumers.
“Is this money going to the restaurant? Is this money going to the driver? Is this money going to the firm? It’s all so opaque,” said Dubal, who has been critical of gig economy companies. “Customers have been frustrated when they look at their receipts.”
In separate statements and comments provided to The Post, Uber Eats, DoorDash, and Grubhub each defended their business models and said their fees were clearly outlined for participants in their marketplace. The companies touted the financial opportunities for couriers and restaurants and the convenience of their apps.
Driver’s receipt from DoorDash. More than half of this driver’s payout came from the tip. Faiz Siddiqui/The Washington Post
THE RESTAURANT
Artesano owner Douglas Mathieux, 54, saw the three orders pop up on his restaurant’s payments system. The kitchen got to work as he studied the receipts.
All three apps charge Mathieux and other restaurant owners for their delivery service. Typically, they can choose among various pricing tiers – basic, plus, and premium – with each level charging restaurants higher commissions but offering additional services and perks, such as surfacing higher when a customer searches for pizza or sushi.
Mathieux pays for the premium tier plan across all three platforms. On every order, he pays a commission of between 25% and 30% of the food charge. In return, his customers get lower delivery fees and he gets greater visibility on the apps, which theoretically helps him reach a broader base of customers.
Mathieux said he charges slightly more for dishes ordered on the apps, a common practice. But the higher charges, he said, don’t fully cover the additional cost of using the apps.
“If the delivery companies didn’t exist, customers would go back to ordering straight from me over the phone or from my website, and I would be able to make money on the orders again,” he said.
As it is, the apps are responsible for about a third of the revenue at Artesano, which is on track to generate about $1 million in sales this year.
“If I decide to not use them anymore,” he said, “it would be shooting myself in the foot.”
DoorDash, which estimates that restaurants pay an average commission of 18 percent, according to financial filings, said it has helped hundreds of thousands of businesses reach more customers and grow their revenue.
Uber Eats said its pricing tiers give restaurant owners flexibility and control over how they engage with the platform.
Grubhub touted the visibility and reach it offers restaurants, and said its pricing is transparent on its website.
THE DRIVERS
All three apps sent drivers to Artesano early, forcing them to wait for the food. Though the drive from the restaurant in the Dogpatch neighborhood to the drop-off near Union Square was only 2.4 miles, each delivery took between 45 minutes and an hour.
Our tip accounted for a third to half of their total earnings.
Their base pay, typically calculated based on time and mileage, varied. In this experiment, Uber batched together orders, which can make it difficult for drivers to determine their earnings per gig. Grubhub and DoorDash broke out the base pay and tip for their deliveries.
Drivers in California are supposed to receive a pre-tip hourly wage of more than $18 for their “engaged” time. At least one of the drivers said he had recently received an “adjustment” paid as a $10 bonus to bump up his earnings. Another driver said it was not unusual to receive adjustments, usually in increments of around $5. DoorDash said it issues a twice-monthly payment if drivers fall below the wage floor, while Uber acknowledged it covers the earnings gap if necessary.
And it can be difficult for drivers to make money, given the wear and tear on their cars and gas prices in San Francisco averaging nearly $5 per gallon. As they pulled up to the drop-off spot, all three drivers expressed frustration.
One of the delivery drivers said the companies are “using the drivers,” and “taking advantage” of them – sending them out over longer distances for less pay.
Uber Eats, DoorDash, and Grubhub pointed to the income drivers can earn, though they acknowledged the uncertainties of wait times and fuel prices. All three apps said couriers receive 100% of the tips paid by customers.
Food app delivery from Artesano. Gabriela Hasbun/The Washington Post
THE DELIVERY APPS
The Post estimated how much each of the app companies made on our order by subtracting taxes and payments to the drivers and the restaurant from the amount we paid. Grubhub took roughly a quarter, while DoorDash took 17% and Uber Eats just under 11%.
The apps are also on the hook for costs that include credit card processing fees, insurance, and customer service, which can reduce their cut further. And they may have issued subsequent driver payouts to ensure they hit the minimum wage floor.
Uber, DoorDash, and Grubhub’s parent company, JustEatTakeaway.com, all reported losses last year, according to their annual financial reports. DoorDash, which has not turned an annual profit in more than two years as a public company, reported that losses grew to nearly $1.4 billion in 2022, from $468 million the year prior – as revenue increased. But Uber Eats and DoorDash both said their quarterly earnings reports reflected promising trends: declining losses even as revenue has ballooned with consistent customer growth.
In the most recent financial quarter, for example, DoorDash’s loss fell compared to the same period a year prior, as its revenue grew.
“Millions of Dashers, tens of millions of consumers, and hundreds of thousands of merchants continue to find value in our products and services in growing numbers, as reinforced by abundant public data and customer feedback,” DoorDash spokesman Ali Musa said.
Uber spokeswoman Meghan Casserly said, “We are committed to doing right by consumers, restaurant partners, and couriers, which is why we work to offer the most clear and straightforward pricing possible on all three sides of the Uber Eats marketplace.”
Grubhub spokeswoman Jenna DeMarco added, “We’re committed to connecting restaurants with more customers, to helping diners find new favorite restaurants, and to providing earnings opportunities for our delivery partners.”
CONCLUSION: TIPS MATTER
Uber, DoorDash, and Grubhub have become synonymous with quick food. The companies banked on technology to help make the food delivery business an affordable and profitable luxury for all.
This experiment shows how smarter, faster algorithms have not entirely solved the problem of point-to-point delivery, long a difficult business model with margins that hinge on small variances of dollars and cents. And a crucial component of each order was the tip – which generated a substantial portion of drivers’ earnings.
While each app treats customers, restaurants, and drivers slightly differently, the receipts suggest the difficulty of all parties coming out ahead in food delivery.
They also show that pickup orders may be the best way to go – for the restaurant and your pocketbook.
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