Coronavirus has inconvenienced most retail outlets but has given a tremendous boost to the food delivery industry. Whereas many brick and mortar establishments have had to scale down their operations or close their restaurants altogether, the Food Delivery Apps witness unprecedented growth due to increased demand from both business owners and their customers. The leading food delivery companies, Uber Eats, Postmates, Grubhub, and Doordash, have more than doubled their combined revenue in 2020, after the pandemic, compared to the same period in the previous year. However, as more people isolate themselves, these food delivery apps have enabled consumers to access prepared meals and keep the food providers in business. That is one reason why companies and consumers are increasingly relying on food delivery services.
Prices are generally determined by the market forces of supply and demand or, in some cases, there may be collaboration among the firms in an oligopolistic market structure. It is interesting to note that in April 2020, the dominant food delivery companies, GrubHub, DoorDash, Postmates, and Uber Eats, were charged in a class-action lawsuit for allegedly exploiting their “monopoly power” and charging excessive fees which are ultimately borne by the consumers.
Nevertheless, the price you pay for your food delivery consists typically of the cost of the menu item, a service fee, taxes, a delivery fee, and an optional tip. That explains the considerable difference between the restaurant price and the price of the delivery apps. There is also a wide variation in prices between the various companies. For example, Uber Eats may charge an extra 29.7% above the restaurant price, whereas the fee charged by Postmates could be 40.5% above the restaurant price for the same item. Companies such as FreshDirect, which deliver from their stores, may also have variations in prices according to your location.
Tips to get the most of food delivery
Despite the dominance of a few companies, the food delivery business is still a competitive field. The following tips should therefore help you to get the most value for your money:
Pick the cheapest app:
Various food delivery apps offer different standards of service at different prices. Therefore, it is important to read reviews to be aware of the options available to you in terms of price and convenience. A good example is the MarketWatch study, which found that Uber Eats was one of the cheapest food delivery apps.
Pick local stores:
Distant food delivery apps relatively charge higher delivery fees. Compared to those whose headquarters are around your area. It is, therefore, more economical to place orders from your local grocery stores, even though.
Many delivery apps offer membership and subscription options. Depending on the company, this option comes with several benefits, such as cheaper rates on deliveries and special savings.
If you can spare the time, it may be quite useful to be on the lookout for discount deals, rewards, and sales. I have come across offers as high as $10 off for orders above a given value. You may also get offers on zero delivery fees. Many such offers are temporary, while others are seasonal. In the coronavirus period, there have been many such offers and delivery deals.
Order directly from the restaurant:
It is important to note that food delivery services charge fees to restaurant and grocery stores. If you’re going through a lean period financially, or you prefer to economize on your spending, then you should consider ordering your food directly from the restaurant or grocery store. This option will save both you and the restaurant from paying avoidable fees.
Consider the service:
Some food delivery apps may have higher prices but offer quality services. Some companies may also provide a wider selection of items compared to their competitors. Such factors should always be considered before making an order.