Over the course of 2020, food delivery apps like DoorDash and Uber Eats have gained extreme popularity, but when the pandemic hit these apps exploded in popularity. These apps may seem great and convenient, but they are terrible for everyone involved. People should stop using them until there is a real solution that can work for everyone.
It would seem that as popular as these apps are, they would be the ones benefiting from that business. They make billions of dollars every year; however, they have yet to make a profit. Throughout 2020, Uber Eats created $4.8 billion in revenue. This is a staggering amount of money, but the costs to operate and run one of these apps are also expansive.
These companies obviously spend a lot of money paying their drivers, but they also spend a lot of money on advertising and promotion. Right at the top of DoorDash’s app there is a section that is just promotions. It’s one of the first things you see as you open the app. These promotions are one of the many reasons these companies aren’t profitable. The fact that these companies don’t make money should be reason enough to rethink how they operate, but that isn’t where it ends.
The apps are also terrible for the delivery drivers, and it isn’t a secret. The drivers are treated as freelancers, which means they don’t get the same benefits, like healthcare or retirement, as employees would. They also don’t pay for external costs like gas or any repairs that may need to be done on the car due to delivering food. While the pay isn’t terrible, when you factor in the lack of benefits and car upkeep, it isn’t great.
These apps are also terrible for the restaurants that deal with them. A lot of local restaurants don’t have the resources to pay for their own drivers, so they have to use these apps if they want to deliver to people. On average, these apps have a 30% commission fee for restaurants using them.
The pandemic forced a lot of restaurants to have to use these apps to stay open. A lot of restaurants couldn’t have people come in and sit down to eat, so they relied on takeout and delivery apps. This means that restaurants that were already struggling to stay afloat weren’t making as much money as they should.
Finally, these apps aren’t great for the consumer. Sure, they’re convenient, but they aren’t cheap. You have the delivery fee and anything else the tack on that is clear when you go to check out, but they also upcharge you in other ways. Menu items can be more expensive on the delivery apps than they would if you ordered at the restaurant. In a video Drew Gooden made on this topic he showed that a Chipotle burrito can be almost $2 more than it would be if you used the Chipotle app. Yes, they’re convenient, but it’s a pretty big price hike for convenience, especially if you use these apps regularly.
These apps just don’t help anybody. The businesses are unprofitable, hurt local restaurants, underpay their drivers and overcharge their consumers. Until there is a real solution that benefits local restaurants, drivers or consumers, people should limit their usage of these services.
Mark Warren can be reached at [email protected] or on Twitter @MarkWarren1832