The COVID-19 pandemic launched several new services to make getting food easier and more convenient.
One of those ways is with food delivery.
While ordering your food at a restaurant, you’ll sometimes see an option to order it for delivery.
Upon seeing your bill, however, you’ll quickly discover that food delivery is quite expensive.
Considering food delivery has long been a part of some businesses like pizza restaurants, you may wonder why it’s sometimes very expensive.
Why Is Food Delivery So Expensive? (10 Reasons)
Food delivery can add as little as $1 to as much as $10 to your total order.
A few factors like restaurant markups, service fees, and the distance the delivery worker needs to drive all influence how expensive food delivery becomes.
Let’s look at these factors in more detail.
1. Markup Prices Via Restaurants
One of the reasons food delivery is expensive has nothing to do with the food delivery app at all.
Restaurants can change how much a person gets charged just as much as the actual food delivery service.
Some restaurants may charge $10 or even more for food delivery.
They have high markup prices because they have to pay high fees to use the delivery service.
A lot of restaurants felt the crunch when the COVID-19 pandemic shut them down.
The only restaurants that were still serving people were takeout places and fast-food restaurants.
Standard sit-down restaurants needed to make money and fast.
The easiest way to start bringing money in was to partner up with a third-party food delivery service.
The problem with this quick solution was that the restaurants were desperate.
They didn’t always get the best deal with the food delivery services.
As such, they found themselves having to pay high fees just to use the service.
Since that cut into their bottom line, they weren’t as profitable as they might have hoped.
Now that the pandemic has waned to the point that people can visit restaurants again, restaurants are starting to drive up the price of delivery.
They’re not as dependent on third-party food delivery services as they once were.
By charging high, they can make back the money that they weren’t getting originally.
Food delivery is expensive because of the high markups that restaurants charge.
2. Large Order
The size of the order also determines how expensive your food delivery fee is.
The larger the order is, the more expensive it’s going to be.
That’s because both restaurants and the food delivery service charge by volume.
If you have a lot of food, it takes a bit more effort for the food delivery worker to deliver it to your home.
They may be unable to pick up other orders, for example, because your order takes up too much time or room.
It also means that the restaurant has to spend more time cooking your order.
Since it costs them more time, they’re going to charge you extra, too.
They’re also going to end up using a good amount of packaging to ensure your order gets to your home safely.
Since that cuts into their bottom line, they’re going to charge you for it.
Smaller orders don’t cost as much.
They’re easier to handle.
They also require less time in the kitchen.
As a result, you won’t get quite an expensive fee added to your food delivery bill.
Food delivery is expensive when you order a large amount of food.
Perhaps one of the main reasons why food delivery is expensive is because it’s a convenience.
It isn’t something that most people need.
In most cases, people can drive and get their food themselves.
In reality, most people are just paying for the convenience of not having to go out.
It’s almost like having your own personal butler or chauffeur in that sense.
You pay someone to pick up your food, so you can relax at home.
Picking up and eating food is a part of your leisure time.
How much you value your leisure time determines how much you’re willing to pay for food delivery services.
Since food delivery is quite expensive, it indicates that people are willing to pay a high price to hold onto their leisure time.
As long as people continue to willingly pay high prices, companies will continue to charge high prices.
It’s also worth considering all the benefits you get out of the convenient service.
Not only does food delivery save you time, but it also lowers how much fuel you use.
If you had to pick up the food yourself, you’d be using gas to get there.
If the food delivery place is on the other side of town, you could even end up using a good amount of fuel.
There’s also the fact that you save yourself a bit of wear and tear on your car.
It may not be much, but it’s still less wear and tear you’d have than if you did go out and get the food yourself.
Since someone else is handling your delivery, you can sit at home, relax, or get some other errands done during that time.
You can be more productive or more relaxed.
However, that extra time comes at a price.
4. Restaurant Prioritizing Their Own Delivery Channels
Another reason food delivery is expensive is that restaurants are pulling away from third-party services.
While some restaurants have a good deal with third-party food delivery services, others are looking to create their own.
Some restaurants developed takeout or carryout services during the pandemic.
Others have had enough time to create their own delivery service.
These restaurants no longer need third-party food deliveries like they once did.
However, they may be stuck in the partnership for several years due to some contract or agreement.
To encourage people to use their other delivery channels, they may be charging high fees to make food delivery expensive.
Whenever someone uses a third-party food delivery service to order food from them, they may find that there’s an expensive charge added to their total order.
However, if they were to use the restaurant’s own delivery channel, they might find that it’s far cheaper.
This is a method that restaurants can use to transition their customers from using third-party food delivery services to their own delivery services.
Restaurants don’t want to have to pay fees to a third party if they can help it.
Many of them know that by having their own delivery service, they can save a lot of money.
To get people to use their own delivery services, they charge higher fees for third-party food delivery services.
People looking for the cheapest option are likely going to choose the restaurant over the third-party app.
Food delivery is expensive because some restaurants are charging higher fees to get people to switch to their own delivery channels.
Food delivery is also expensive because of all the fees included in the final order.
When you look at your bill, you’ll see several listed.
Some food delivery services may not even include hidden fees added to the bill.
Two of the biggest fees you’ll see are service fees and delivery fees.
Service fees are an amount that you pay to the food delivery service for its service.
The company uses the fee to keep the lights on in the business.
The other fee, the delivery fee, is what the delivery worker earns on the order.
Different food delivery companies have different fees and rules.
Some, for example, don’t let their delivery workers get 100% of the delivery fee.
They share that fee with the company.
As such, you might see a delivery fee that is $7.00.
The delivery driver might get $4.00 of that while the company gets $3.00.
Other delivery companies allow their drivers to get 100% of the delivery fee.
However each company handles it, that fee adds to your total.
There are also hidden fees like commission fees that the food delivery company has the restaurants pay them.
The commission fee often depends on what level of membership the restaurant has with the food delivery company.
Restaurants have to pay that amount to the food delivery company to use their services.
This adds to your total bill because it means the restaurant usually passes that fee onto the customer through higher prices on their menu items or their own fees.
Fees can quickly drive up your bill and make food delivery expensive.
Another major factor that makes food delivery expensive is tips.
Food delivery is not unlike being a waiter or waitress.
You get paid a small amount of money with the expectation of earning tips to make your income.
There’s been a lot of discussion in the employment world about food delivery pay and whether companies should be paying their delivery workers a living wage or not.
In most cases, delivery workers only earn about $3.00 or $4.00 on each order.
They rely on tips to make a living.
That’s why you’ll often have drivers who refuse to take on an order if there isn’t a tip included.
It isn’t worth the time and money that they have to spend to get the food to the customer.
Unfortunately, this means that not every customer can afford food delivery services.
The general expectation for a tip is $15 and higher.
The further you are from the restaurant or the size of your order can determine how much you should be paying.
A lot of customers use food delivery expecting it to be a cheap service.
It’s a service meant for households that make a certain income.
If you’re ordering food that costs less than what your tip should be, using food delivery may not be worth it to you.
It’s worth determining how much you actually value your leisure time.
Food delivery is expensive because tips can easily cost more than the actual price of the food.
7. High Food Prices
The price of food also impacts how expensive food delivery becomes.
There are two halves of the equation that determine the total of your food delivery bill.
There’s the food delivery service side and then there’s the restaurant side.
If either of those sides starts to experience higher costs, they’re going to raise delivery prices on their end.
Restaurants, in particular, have been feeling that crunch with food costs.
There are several reasons behind rising food costs.
While inflation is certainly part of it, there have also been a lot of problems in the agriculture world that have also impacted the price of food.
Drought, wildfires, freezing temperatures, pests, diseases, and an assortment of other factors have made it more expensive to farm.
Even the price of fertilizer has required farmers to increase the prices of their crops.
Restaurants take on higher costs because they’re spending more money on the ingredients that they need.
Since they’re taking on higher costs, they have to make up for them.
One way that they’re doing that is by charging higher fees for delivery services.
It’s already a service based on convenience.
Restaurants expect that those using the service likely have an expendable income that’s quite high.
They can take the price increase.
The problem is this isn’t true for everyone.
Families looking to splurge one evening will get hit with an expensive food delivery bill because of the restaurant’s choice.
Because restaurants are experiencing high food costs, food delivery is expensive.
8. Fuel Costs
While high food costs are causing restaurants to raise their prices on food delivery apps, fuel costs are causing food delivery apps to also raise their prices.
There are several factors behind high fuel costs.
Inflation is a large one, but the problem of supply and chain has also impacted oil prices.
Many oil refineries had to close down during the pandemic.
This meant there were only a few barrels of oil produced a day.
While this wasn’t a bad thing when few people were driving, the lockdowns ended faster than most people expected.
Oil refineries weren’t ready to meet a sudden increase in demand.
As a result, there wasn’t enough supply to get everywhere.
With high demand and low supply, oil companies were able to charge top dollar.
This impacts gas prices.
Delivery drivers use a lot of gas to make their deliveries.
Since it cuts into how much they’re able to make with each trip, food delivery apps have increased their fees.
This ensures that they can still make some money from each order.
Food delivery is expensive because of high gas prices.
9. Peak Surge Prices
Another reason food delivery is expensive is that some companies charge higher rates during peak times.
Peak times are during lunch hour and dinner hours.
It’s when there are a lot of orders put into the service but not enough drivers to handle them all.
To encourage drivers to pick up as many orders as they can, food delivery apps will charge clients higher fees.
Drivers are then able to earn more.
Not every food delivery service uses peak surge pricing, but those that do are far more expensive during peak lunch and dinner times.
A final reason food delivery is expensive is that you’re far from the restaurant.
Some food delivery companies charge by the mile.
The more miles between you and the restaurant, the longer the delivery worker has to drive.
That essentially means they’re burning more gas and spending more time to give you your order.
If you live far from the restaurant, you can expect a pretty high food delivery bill.
Food delivery is a convenient service that saves you time.
Because it’s convenient, the service tends to become expensive.
Other factors, like those listed above, also influence your food delivery bill.