Uber Eats is a food delivery platform that ensures that getting good food from your favorite meal is as easy as requesting a cab. The Uber Eats app connects people to a wide network of local foods and restaurants so they can enjoy orders from the full menu of their desired local restaurants whenever they like.
However, Uber eats is so expensive, but why is it so expensive? Provided below is an all-inclusive look at why Uber Eats is so expensive.
Why Is Uber Eats So Expensive?
The question of “why is Uber eats so expensive?” is one that has been asked on many occasions. Why does it cost more for food to be delivered than if you drove? Why are there delivery fees? Why do the prices change depending on where you live and what time it is? There are several reasons why Uber Eats is So Expensive. Below is a comprehensive guide on its expensive price differences.
More orders than delivery partners
An extra fee is charged when more orders are made than partners to deliver the food in that area. Uber eats charges an extra fee to ensure people can still get the food they ordered when they request it.
However, the app informs customers when an area is busy. When you go to the home screen page, it will display an arrow showing the extra fee. Once you open the restaurant menu, it will display the amount.
Increase in demand
Recent research by the Wall Street Journal shows that food delivery prices have increased ever since the COVID-19 pandemic. Necessity breeds invention; because of the pandemic, many people stayed indoors; therefore, accessing restaurants became a hard task. People sought another way, and delivery apps like Uber Eats became the solution.
This saw an increase in customers for Uber eats, which led to increased demand for food delivery. To meet the demand and keep customers satisfied, Uber eats increased the prices to cover the extra cost and provide customers with quality on-time food delivery services.
High commission costs
Uber eats, including other third-party delivery apps, charge commission fees for orders made in restaurants using their services. It has come to light that third-party delivery apps charge a 30% commission for every order, which can offset the books of any restaurant.
With the ongoing pandemic, restaurants struggle to fight back against the loss of customers and high commissions charged by delivery platforms. To remedy the situation, restaurants have increased the price of foods to cover the high commissions charged by delivery platforms.
This, in turn, leads to food delivery becoming expensive to customers making Uber Eats very expensive. Municipalities have put in place commission fee caps to deal with the extra expenses incurred by high commissions.
Reinvesting back into business
Uber eats has faced backlash from customers for the high prices it charges. In response, Uber eats stated one of the reasons being rider’s fee. The company has had to reinvest in the business by paying customer services, upgrading their restaurant services, and paying riders.
To handle all aspects, including delivery and receiving orders, Uber Eats requires a large staff dedicated to pleasing customers with good on-time services. We all know it’s not voluntary work; they have to be paid. Uber eats has to funnel money back into the business to help cover these fees.
Spending money on marketing
During your online sessions, there is a high chance you came across one of its advertisements. Uber eats’ major marketing strategy is a data-driven focus that digs through its customers’ data, reviewing past orders to see the most common orders and trends in purchase behavior. Back in 2018, it recorded over 1,600 online virtual restaurants, and the number is increasing rapidly and steadily over time.
For a more comprehensive marketing strategy, they employed location-based marketing. Apart from The Brooklyn Burger Factory, Uber eats still has so much more up its sleeve. It markets service to commuters on food preferences and their location data. Since they already have the customers’ destination, time, and data, they can localize delivery by changing the market strategy to fit people living in different global regions.
Many good food delivery platforms exist in the market right now. To make it in this ever-competing market, you need a good marketing strategy that doesn’t come cheap.
Split in order fees
Uber eats split its fee into service, delivery, and a small order fee from its initial booking fee per order. When you include taxes, service, and delivery fees, the total sum becomes a little more than the initial charges.
Before, Uber eats would subsidize orders, and they did not charge service fees or small carts. Uber eats is trying to make a profitable situation on services they offer. There has been a shift in prices, which isn’t necessarily bad since it shows they are more focused than before, where they did not charge customers what it cost to get food delivered.
App maintenance fee
People tend to forget the Uber eats app was created by someone, and to keep up with upcoming trends, it needs to be scaled up and properly maintained. In case of bugs or updates, maintaining such a widely used app requires an army of staff who don’t work for free, and coders and programmers are not cheap.
In addition to that, the cost needs to be covered by their partnered network providers. To cope with these charges, Uber eats had to ramp up its prices. Most people see the revenue income Uber eats makes, but they don’t understand that it also loses much money to other endeavors that ensure customers get top-quality service.
Is Uber eats overpriced?
It’s evident that going for your order is cheaper than using the Uber eats delivery platform. However, if you factor in the convenience and luxury, the scales shift, suddenly the price though expensive, seems worth it. Many people might argue that Uber eats is overpriced, but they fail to understand that luxury comes at a cost.
Compared to other food delivery platforms, uber eats surprisingly is considered cheaper despite its high base price. Grub hub was originally the more affordable option before it purchased Seamless, Order UP, and Foodler. The answer to the question of Uber Eats is overpriced is contradictory. It depends on how people view it. If you compare it to other third-party delivery apps, it’s a cheaper option, but overall, it’s quite overpriced.
Uber Eats vs. Door Dash
On the surface, these two apps present almost similar features and are available in various cities. Since they offer almost similar features, the difference boils down to pricing and services. Both apps charge a small order fee if your subtotal goes below a certain preset minimum. However, DoorDash maintains a lower order minimum compared to Uber Eats, which shows that the company often removes the small order fee if buyers only order one item.
Both apps have promotions, but Uber Eats contains some wonderful ones like constantly providing a free or 99 cents delivery fee for some restaurants. Door dash offers a lower service fee on orders higher than $12, while uber eats offers A 5% markdown for orders higher than $15. Uber eats is the cheaper option. Surprisingly, Doordash has managed to capture a broader market than all the rest.
Postmates vs. Uber Eats
Postmates was not specifically envisioned as a food delivery platform the original idea behind it was to be more of a rideshare but for objects. A big difference between the two delivery apps is that Postmates provides delivery from almost any restaurant, while Uber Eats offers delivery from partnered restaurants.
They both charge customer delivery fees, including service fees, but there is a slight difference in their prices. As mentioned above, Uber eats offers A 5% markdown for orders higher than $15of the subtotal. The delivery fees range from $0.99 to $7.99, depending on the distance.
On the other hand, Postmates determines the delivery fee depending on the restaurant’s location. They both are almost similar in pricing for overall charges, but Postmates is a bit cheaper if you eye their promotions. The delivery fee ranges from $3.99 to$5.99. Some merchants may add a merchant fee of about $1.
Grubhub vs. Uber Eats
Grub hub is the oldest delivery food platform which initially started as a website. Grubhub is available in 4000 U.S. cities and UK London. The delivery fee ranges from $1 to $10, depending on the location. The type of restaurant you order from also will determine the fee to be charged.
The same case applies to Uber Eats.
With Grubhub, the volume of food you order will not affect the delivery fee or the current level of demand. On the other hand, Uber eats will charge you an extra fee if your area is busy.
How to get Uber eats cheap.
Ordering food through Uber eats might not be cheap, but there are a handful of methods you can try to save up on cash:
You can start by browsing cheaper restaurants from the app. If you find it difficult, just set the filter to the price you are comfortable paying, and it will show only restaurants within your budget range.
Individual restaurants also have their offers, so you don’t have to depend on Uber Eats offers to save up on money. Click on the promotion section, and you might find some fantastic offers in store for you.
Uber Eats is a big name in the food delivery business; it certainly punches above its weight. Uber Eats is expensive, but it’s a necessary evil, especially during this pandemic whereby restaurants have not been fully opened. As discussed above, luxury comes at a price.
About Dawson Kutch
Dawson Kutch is a born and raised Alaskan who loves the outdoors and everything it has to offer. Kutch has been an avid hunter and fisher his entire life, and takes great pride in providing for himself and his family. While he enjoys spending time in the great outdoors, Kutch also has a passion for fashion and loves to stay up-to-date on the latest trends. In his free time, Kutch enjoys spending time with his wife and one young daughter. He is always looking to learn more and better himself, both as a writer and as a person.