ALEXANDRIA, Va.—Customers who order food for delivery via apps like Uber Eats, DoorDash and Grubhub are sometimes surprised by their total bills for the convenient service, so some officials are pressing the third-party providers for price transparency. In response to prodding by attorneys general in Pennsylvania and Washington, D.C., Uber Eats is now telling its app users in those jurisdictions that “prices may be lower in store,” Bloomberg reports.
“Food delivery apps provide convenience, safety, and ease for so many consumers—especially during the pandemic,” D.C. Attorney General Karl Racine said in a news release. “As more and more consumers use apps like Uber Eats, it’s critical that these companies are transparent about their pricing and the fact that getting food directly from a restaurant is often cheaper. We appreciate Uber Eats immediately addressing our concerns,” he said.
“Going forward, Uber Eats’ delivery app will make clear that its prices may be more expensive than those charged by the restaurants themselves. We strongly encourage other delivery apps to follow in Uber Eats’ footsteps. Those that do not risk investigation and scrutiny by our offices. Consumers deserve clear information so they can make informed decisions that work best for them,” Racine said.
Soaring demand for third-party delivery soaring during the pandemic brought renewed scrutiny to the fees third-party services charge not only consumers but also foodservice providers. Casey’s, based in Ankeny, Iowa, and other convenience stores have expanded partnerships with third-party platforms like Uber Eats to broaden the reach of their marketplace.
“Online food delivery platforms can be very convenient, but hidden fees have driven up costs for consumers and hurt struggling neighborhood restaurants at the worst time,” said Josh Shapiro, Pennsylvania’s attorney general, in the press statement. “You deserve to know where your money is going, and I’m pleased that by working together Uber Eats made their pricing more transparent.” Shapiro called on “all food-delivery platform companies to provide this same information as soon as possible.”
The attorneys general in D.C. and Pennsylvania stress to consumers three key points about using delivery apps:
- Items are often more expensive in the app.
- Delivery apps charge service fees delivery fees, plus taxes.
- Restaurants pay commissions on the percentage of each order to the delivery apps, on top of the fees that customers pay. Consumers can avoid the fees by ordering and picking up directly from the restaurant or business.
In an emailed statement to Bloomberg, an Uber spokesman said, “Merchants set their own prices for items listed on Uber Eats. We think it’s important to provide this flexibility to our merchant partners, especially during the recovery of local commerce.”
Meanwhile, some restaurants that used food delivery apps last year are abandoning the service now that dining rooms have reopened so they can focus on their in-person guests and better manage their kitchens.
“Actually, now as we're opening back up we've turned off our third-party delivery services,” Jennifer Meltzer, the managing partner at All Set Restaurant and Bar and Money Muscle BBQ in downtown Silver Spring, Md., told WUSA9. “I'm having to balance how long our guests are going to wait in the restaurant for their food to have a dining experience, because I can't, I can't control the flow of tickets,” Meltzer told the news station.
“NACS Research last year released its landmark “NACS Last Mile Fulfillment in Convenience Retail” study, outlining the opportunity for convenience retailers to grow sales and expand customer reach as the market evolves. Download it free here.”
Not a NACS Magazine or NACS Daily subscriber? Subscribe to NACS Magazine in a print and/or digital format to read the latest insights from industry thought leaders each month. Subscribe to NACS Daily to receive a roundup of industry news and trends in your inbox each weekday. Subscriptions to NACS Magazine and NACS Daily are complimentary for readers in the convenience retailing industry—you just need to sign up!