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September 16, 2024
This article explores the ongoing battle between major third-party food delivery services like DoorDash, Uber Eats, and Grubhub, focusing on how these platforms impact restaurant owners.
Battle of the Third-Party Food Delivery Services: Who Wins?
Major third-party food delivery services are waging an epic battle in our post-pandemic restaurant industry.
Some are gobbling up resources, as Uber Technologies did to its rival Postmates in 2020, spending 2.65 billion dollars in order to do so.
Others, like Grubhub, are willing to put almost a quarter of their annual revenue on the line ($580 million in 2022) to cut through the advertising clutter.
Still, others are playing offense and defense simultaneously. For instance, it’s no shocker that DoorDash is working to protect and improve its estimated 67% market share of American food delivery sales in 2024.
These are impressive numbers. But what does this battle of third-party food delivery services mean for restaurant owners?
For sure, they have their advantages, some of which we’ll talk about below. But they also have some downsides worth being aware of, as you’ll soon find out.
If you’re a small or independent business owner especially, third-party delivery apps can be appealing for several reasons:
With these pros in mind, let’s take a closer look at the three most popular food delivery services.
The most well-known third-party food delivery services—DoorDash, Uber Eats, and Grubhub—are hard to ignore. But just because they get a lot of airtime doesn't necessarily mean they're a good fit for restaurant owners across the board. That’s why it’s worth comparing them to one another (and to other delivery enablement solutions) to see which is right for you.
DoorDash positions itself as a partner that helps restaurants reach a wide audience, with over 32 million monthly active consumers according to the 2022 DoorDash, Inc. ESG Update.
It offers several partnership plans to fit different business needs, including options for delivery and pickup through the DoorDash Marketplace, and commission-free ordering via Storefront.
Pros:
Cons:
Pricing: DoorDash commission rates vary based on the partnership plan, with options for different levels of marketing support.
Uber Eats leverages its extensive network and technology from its ride-sharing business to offer a reliable and efficient food delivery service.
It provides a user-friendly platform for managing orders and integrates with existing POS systems.
Pros:
Cons:
Pricing: A 25% fee for delivery orders and a 6% fee for pickup orders.
Grubhub offers flexible pricing plans and emphasizes marketing support to help restaurants reach more customers.
It provides options for self-delivery and white-label services, along with various marketing features.
Pros:
Cons:
Pricing: Marketing rates start at 5% for the Basic plan, with higher rates for more exposure and delivery services.
While these three major players are dominating the delivery market, you need a strategic approach to using these services. In particular, it’s essential to balance the potential for increased exposure and sales with the impact of fees on profit margins.
If you’re like a lot of restaurant owners today, you see the value in using one of these bigger third-party vendors. Especially as an alternative to the typical way of managing in-house delivery, which can quickly drain your time, energy, and wallet if you’re not careful.
However, remember that you’re not limited only to the typical third-party options. Solutions like Tarro Delivery can essentially take in-house delivery operations off your hands for a fraction of the price of what some third-party platforms charge.
Not only would you save money on delivery costs, but your customers would also pay an average of $10 less per order, making people more likely to keep ordering from you again and again. And what do lower costs and more delivery sales add up to? More profit, of course.
Whether you’re looking into your first third-party delivery platform or one to supplement other services you use, consider the following:
Finding and hiring in-house delivery drivers is hard enough without the added struggle of managing them day-to-day. And keeping delivery operations running smoothly if and when they call out sick or there’s a sudden flood of orders. However, the most common fix—using popular third-party delivery services like DoorDash—costs a pretty penny.
You shouldn’t automatically discount these services since they do give you access to a wide range of customers and offer some level of convenience. But it’s smart not to rely totally on them.
Tarro Delivery is a much more cost-effective way to ensure a seamless, efficient delivery process.
Plus, it can help you boost your order volume by up to 13%, which can do wonders for your bottom line. Just imagine what you could do with that extra revenue! Even better, take the first step toward actually earning it by learning more about our delivery service today.
Discover how services like Tarro can relieve your team from constant phone orders, allowing you to focus on your food and customers.
Read more
Discover how services like Tarro can relieve your team from constant phone orders, allowing you to focus on your food and customers.
Read more
This article explores the ongoing battle between major third-party food delivery services like DoorDash, Uber Eats, and Grubhub, focusing on how these platforms impact restaurant owners.
Read more
This article explores the ongoing battle between major third-party food delivery services like DoorDash, Uber Eats, and Grubhub, focusing on how these platforms impact restaurant owners.
Read more