With the additional costs associated with ordering from certain restaurants via Uber Eats, many consumers are beginning to realize that the more economical choice might be to pay for an Uber ride and pick up the food directly from the restaurant.
MyBroadband’s regular pricing comparisons reveal that purchasing food through popular delivery platforms like Mr D and Uber Eats can often result in significantly inflated prices compared to ordering directly from the restaurant. This trend has left many diners questioning whether the convenience of third-party delivery is worth the extra expense.
The reasons for these price discrepancies are straightforward.
To ensure their business model remains profitable, on-demand app services, such as Uber, impose a commission fee on restaurants and other food-serving entities that sell through their platforms. This commission is anywhere from 15% to 30% of the total order value.
Additionally, UpMenu has indicated that Uber Eats may impose various fees for processing and marketing services, which can further erode the profit margins of restaurants that utilize the platform.
To alleviate the financial burden imposed by these commissions, restaurants often increase the prices of menu items sold via Uber Eats, making direct purchases more appealing to consumers.
Regardless of whether you opt for Collection or Delivery through Mr D or Uber Eats, ordering food through these platforms typically incurs an extra fee.
Following a recent claim from a MyBroadband reader who suggested that it would be cheaper to use an Uber ride to pick up food personally rather than using delivery via Uber Eats, we decided to conduct a thorough investigation.
We devised a hypothetical order from a nearby McDonald’s to analyze and compare the cost of arranging an Uber ride and purchasing the food directly from the restaurant against having Uber Eats deliver it from the same outlet.
The total cost for a two-way Uber ride, covering a distance of 7.8 km from our residence to the restaurant, was calculated at R88.
In contrast, the distance-based delivery fee from the specified McDonald’s branch to our home was only R16, highlighting a sizable difference.
This meant that for ordering through Uber Eats to be more expensive than using an Uber ride with direct ordering, the total additional cost of the food would need to reach at least R72.
Using McDonald’s pricing structure that reflects a 30% markup, we estimated that our minimum order value (when purchased directly) would need to be approximately R240 in order to incur that extra R72 cost.
However, it’s important to note that Uber Eats also charges a service fee, which does not have a clearly defined calculation. This service fee effectively reduces the difference that needs to be accounted for, thereby altering the total order value necessary for a fair comparison with the Uber Eats price.
As we analyzed our order value, which reached R210.60 with three popular items, it became apparent that this amount was already sufficient to account for the discrepancy since a service fee of R13.70 had also been applied.
Ultimately, the total additional cost of ordering through Uber Eats amounted to R93.30, which is 44.3% higher than the cost of direct purchases. This total does not include any tips, which could further increase the overall expense.
By opting for an Uber ride to collect the food directly in this scenario would result in a cost that was R5.30 less than using Uber Eats.
Below is a concise summary of the expenses associated with the two different options for our analysis.
| Uber Ride + Direct McDonald’s pickup | Uber Eats | |
|---|---|---|
A case-by-case basis
While this comparison provided valuable insights, it’s clear that the most budget-friendly alternative would involve driving yourself.
The majority of cars in South Africa would not consume R88 worth of petrol for a 7.8 km journey, making self-collection a more economical choice for many.
For those who appreciate the convenience of ordering from home, utilizing McDonald’s own McDelivery service could be a smart alternative.
This service allows you to order directly from the restaurant at its standard prices, with a nominal delivery fee of R15.
Nevertheless, it is worth noting that not every restaurant offers its own direct ordering app or website, although many still provide options for you to call in and arrange pickup and payment in person.
For individuals who desire the ease of food delivery from their favorite restaurants, services like Mr D and Uber Eats remain viable options.
Ultimately, whether it’s more cost-effective to use an Uber ride for pickup or opt for Uber Eats hinges on several factors, including:
- Restaurant or chain — Additional fees may fluctuate between different restaurants.
- Total order value — Typically, smaller orders are cheaper via Uber Eats, while orders exceeding R300 could be more economical to pick up in person.
- Distance to restaurant — This directly affects the cost of the Uber ride and the associated delivery fees; Uber ride expenses tend to increase significantly with distance.
- Time of your order — Fares for Uber rides can change dramatically based on the time of day and current demand, meaning the price initially shown may not reflect the final cost after considering traffic and ride length.
**Interview with Financial Analyst Sarah Thompson on Food Delivery Costs**
**Interviewer:** Welcome, Sarah! Thank you for joining us today. Recent findings have suggested that using delivery services like Uber Eats can often lead to inflated food prices. What are your thoughts on this?
**Sarah Thompson:** Thank you for having me! It’s true; we’ve seen a significant trend where on-demand app services charge restaurants hefty commission fees, sometimes between 20% to 37%. This ultimately affects consumers by making food prices higher than if they ordered directly from the venue.
**Interviewer:** That’s interesting. Can you elaborate on how these extra costs accumulate for consumers?
**Sarah Thompson:** Certainly! When restaurants have to pay high commissions and additional fees for listing their products on platforms like Uber Eats, they often pass those costs onto the consumers by raising menu prices. This, in conjunction with service fees from the app itself, means that the total cost of delivery can easily surpass the cost of taking a short Uber ride to pick up the food yourself.
**Interviewer:** You mentioned a case study involving McDonald’s. Can you walk us through that?
**Sarah Thompson:** Sure! We analyzed the cost of ordering from a McDonald’s branch—considering both an Uber ride to pick up the food and ordering through Uber Eats. We found that an Uber ride for a 7.8 km distance cost about R88, while delivery fees from Uber Eats were R16. The total cost when purchasing directly was significantly lower than the inflated prices through the app.
**Interviewer:** That is quite a difference! So, in your analysis, what was the overall outcome in terms of costs?
**Sarah Thompson:** In our hypothetical order, it appeared that ordering via Uber Eats was approximately 44.3% higher than ordering directly after accounting for the service fee. Ultimately, it cost R5.30 less to take an Uber and pick up the food directly as opposed to using the delivery service.
**Interviewer:** That certainly offers a compelling argument for considering direct orders. Are there scenarios where using delivery apps can still be beneficial?
**Sarah Thompson:** Absolutely! If someone is unable to pick up food due to time constraints, physical limitations, or other reasons, the convenience of delivery might outweigh the added costs. However, for those who are able to make the trip, it can often be more economical to get the food themselves.
**Interviewer:** Thank you, Sarah. This insight into food delivery economics is extremely valuable. What final thoughts would you like to leave our audience with?
**Sarah Thompson:** I encourage consumers to be mindful of where they’re spending their money. If convenience is a priority, that’s understandable, but it’s worth checking whether it’s more cost-effective to just pick up food directly. Always do the math before ordering!
**Interviewer:** Great advice! Thank you for your time, Sarah.
