Having the restaurant delivered to your home costs on average 36% more than picking up the dishes directly, 57% if you include the tip to the delivery person, according to data compiled by The duty.
In addition to the myriad of fees charged by apps like Doordash and Uber Eats and listed on your bill (delivery fees, service fees, tipping the delivery person), restaurant owners are increasing their prices by an average of 9.5% on these apps, without this being indicated during the transaction. This is shown by the analysis of Duty 265 dishes concocted by some fifty Montreal establishments.
If you order a Thai pad directly at the counter at Thaï Express, the price on the menu is $11.58 while it is $13.38 on Doordash and Uber Eats.
To this amount are added service and delivery charges. Consumers are also advised to tip at least 15% to delivery people who are “providing an essential service to our communities at this time”, it says at checkout, when many people don’t. do not add a tip when paying at the restaurant counter. In the end, the total bill thus climbs to $18.06, or 56% more than if the pad Thai had been purchased without an intermediary.
Clear commissions
All restaurateurs sign a contract with the multinational owners of the meal delivery applications with which they do business. They must pay, during each transaction, up to 30% commission on the order. During periods of health restrictions, the government has temporarily capped this commission at 20%, but the return to normal is expected on March 14.
Faced with the grumbling of restaurateurs about the high rate of these commissions, Uber Eats authorized them to increase their prices on their virtual menus as compensation. “We consider it important that they have this flexibility, particularly during this period of recovery for local businesses,” said the Duty Jonathan Hamel, public affairs manager for Uber Eats in Quebec.
Doordash also allows restaurant owners to increase their prices. “However, we still recommend that for a better customer experience, prices on the app should be the same as on the restaurant menu,” Oindrila Hazra, a Doordash spokeswoman, said in an email.
“If you want cheaper sandwiches, come to the store!” says a Montreal restaurateur right off the bat. His in-store $5 egg and cheese bagel costs Uber Eats users $6.90. He requested anonymity for fear of being penalized by the delivery apps he uses by losing visibility on their platforms.
Reza Sedighi, owner of La New York pizzeria in Griffintown, resigned himself to raising his prices last fall. His pizza is now $33 on Uber Eats, up from $30 at the outlet. “I increased my rates because of the increased cost of ingredients, but also to compensate for what I pay as a service charge,” he says.
According to our compilation, restaurateurs are raising their prices by 9.5% on average. But nothing prevents them from having much more substantial increases. In our sample, an entree of chips and guacamole was twice as expensive on Uber Eats, going from $2.35 in restaurant to $4.95 on the app.
The choice of non-increased prices
The price of popular “gourmet salads” from the Montreal chain Mandy’s remains unchanged on delivery apps. According to the data we compiled, one in four restaurants kept the same prices on Uber Eats as in-store and about one in five on Doordash.
Mandy’s prioritizes sales volume over profit margin. Uber Eats and Doordash alone account for nearly half of Mandy’s revenue.
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“You don’t make a lot of money with all the fees, but it’s enough to keep the prices the same,” said company co-founder Mandy Wolfe. Before the pandemic, she negotiated with Uber Eats a commission of less than 25%.
The Pho 911 restaurant, on the Plateau Mont-Royal, has adopted the same strategy. “We wanted to have competitive prices online,” explains manager Nick Vo. This calculation allowed them to make themselves known when the restaurant opened in 2016; between 50% and 60% of their sales now go through three delivery apps.
Uber Eats, DoorDash and SkipTheDishes alone account for 80% of app deliveries in Quebec, according to the Quebec Ministry of Agriculture, Fisheries and Food.
“Legal, but not ethical”
Although prices are on average 10% higher on the Uber Eats menu than at the counter, the consumer sees no trace of this on their bill. You have to go to the “Help” section of the app and website or to the terms of use to see that restaurants have the right to change their prices. And this, in complete legality since the consumer freely decides to use the application. “But it’s not very ethical,” says Pierre-Claude Lafond, associate professor at the University of Montreal specializing in consumer law. “There is no misrepresentation, but it requires an additional step for the consumer to find out about the price differences,” he adds.
Mr. Lafond strongly recommends better regulating the practices of delivery applications. “It creates a somewhat abusive situation and that is why the American states intervened. The consumer pays more and the restaurant will also give a commission. One would think that the Quebec legislator should intervene here. Not because there is a deception, but because there is like an abuse in the profit, ”he believes.
In the United States, prosecutors in Washington and Pennsylvania reached an agreement with Uber Eats last June to ensure price transparency. They thus agreed with the multinational to clearly indicate, directly in the consumer’s basket, the existence of price differences between online purchases and orders placed directly with restaurants.
“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 possible time,” the Pennsylvania attorney general said in an official statement. , Josh Shapiro.
In interview with The duty, the Minister of Agriculture, Fisheries and Food, André Lamontagne, seemed surprised that consumers pay on average 36% more by ordering their meals on the applications (57% if we include the tip to the delivery person) . However, he does not intend to intervene: “The consumer, ultimately, it is his choice how much he wants to pay. Before the pandemic, I would order from a restaurant and know that I was paying more than if I went to pick it up. Sometimes I pick it up, I drive two minutes,” explains Mr. Lamontagne.
The restorers to whom The duty spoke are for their part unanimous: it is now almost impossible for them to do without the services of delivery applications and feel held hostage. This is the case of the owner of the La New York pizzeria: “In 2019, I stopped Uber Eats for almost eight months. But the clientele forced us to have this service so much that we had to restart. During the pandemic, it helped me a lot to keep in touch with my customers. But there is a price to pay. »