It’s surprising that none of these companies are doing very well financially despite their aggressive expansion. (It’s worth pointing out that the way UberEats markets itself to drivers boils down to “make some quick money” with a thin veneer of empowerment and freedom.)įor over a year now, I have been following the news on this industry. I suspect the only way to know the average hourly rate is to actually sign up and work for the service and keep track yourself. You would not know this from UberEats’ website – I actually could not find any information about how much to expect in hourly wages. The drivers working for these services do not make much money either. All of this for very little/negative profit margin. This operational struggle is very real for some of the restaurant owners I’ve talked to. And you have to redesign your operations to accommodate a new source of orders: anything from “where do we stick the 4 delivery tablets?” to finding storage room for more packaging. And the operational headaches: If delivery grows, you have to staff up for it, so you can’t spread the labor costs over more sales anymore. Very few customers have the awareness to separate the restaurant experience from the delivery experience it’s all one and the same. On top of eating up your profit and being a marketing tool of questionable efficacy, these delivery services have tons other intangible ways to chip away at the restaurant’s value, like bad delivery experiences to refund, food to remake when it arrives cold and potential brand damage. That was surprising! Uber has TOO MUCH FREAKIN’ DATA for me to believe they haven’t looked at this. return rates from UberEats to in-store) they couldn’t produce anything. I was not convinced, and when I pressed them for some kind of stats on the topic (i.e. Maybe you break even or lose a bit on the initial order, they said, but that customer will return to your shop and order directly from you, so you’ll make money on subsequent transactions. Being on UberEats puts a million gajillion local eyeballs on your business, they said. If you do “legacy” advertising, you are spending money on print, TV, radio, billboards, etc. UberEats pitched their service to me as a profit-neutral marketing platform. These services eat up the entire margin for most orders – and for some businesses, it generates an actual loss. A restaurant would be BLESSED to run at 30% net margin more commonly, margins hover below 15%. Last year, I spoke to someone from UberEats, which charges a 30% commission. Maybe I’ll sound a bit alarmist for your taste as you read below… But maybe I convince you to try a different way to support your local businesses!ĭo you know how these companies make money? These delivery companies make money by charging customers an opaque delivery fee (typically under $8) and charging the restaurant a commission on every order generated, typically 20-40%. By charging low delivery fees, these services massively devalue the work and time that goes into preparing meals and getting them to you, all while creating little/negative value for the parties doing the work. ![]() ![]() We have made a very conscious decision NOT to partner with any of these service providers. During our recent BIG IDEAS customer survey where we asked you what you want to see from Rebelle, a few of you mentioned you wanted to see us on delivery services like UberEats, Grubhub and DoorDash.
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