Business
September 22, 2020

The Ultimate Guide To Delivery Services For Restaurants: Doordash, Ubereats, and Beyond

Business
September 22, 2020

The Ultimate Guide To Delivery Services For Restaurants: Doordash, Ubereats, and Beyond

In 2020, offering delivery as a restaurant is no longer an option. But with over a dozen third-party delivery platforms to choose from, it can be challenging to identify which delivery services are right for your restaurant.

We’re breaking down all the essential data you need to pick your ideal restaurant delivery service for your restaurant, from platform commissions, sizes, integrations, and more.

Our goal is to help you…

  • Understand the key differences between major delivery services
  • Quickly compare costs and fees (rather than looking them up one-by-one)
  • Create a food delivery program that’s profitable and sustainable

We’ll begin with our deep-dive comparison of six major restaurant delivery services, then offer helpful tips for staying profitable despite the high commissions.

We created a simple guide to maximizing your delivery margins. With delivery fees and commissions taking up 20-30% of your total order value, optimizing your delivery menu for profitability is non-negotiable.

GET THE DELIVERY MARGIN MAXIMIZER

DoorDash Delivery for Restaurants 101

Founded in 2013, DoorDash has quickly established itself as a leader in the food delivery world. Valued at over $13 billion and with 300,000 participating restaurants, DoorDash has the largest market share in North America at an estimated 45% in 2020.

DoorDash’s reach is top-tier, and the company’s expansion is still accelerating. The service is available in over 4,000 cities across the U.S. and Canada.

What’s It Like to Be a DoorDash Partner?

DoorDash is a well-funded, polished platform that most restaurant owners report is easy to use. According to a Slice Intelligence study, DoorDash’s customers are some of the highest spenders in the delivery world, with 20% of orders being $50 or more.

Restaurants can engage with the full-service marketplace through a handful of products and services:

  • Delivery Fulfillment
  • Customer Takeout 
  • DoorDash Drive
  • Group Ordering
  • DoorDash for Business

DoorDash Drive is a white-label service that allows restaurants to leverage DoorDash’s technology and delivery network while still owning the customer experience. If you want the convenience of delivery fulfillment, but also want to create a uniquely branded experience, this service could be a good fit for you.

DoorDash for Business is a standard corporate catering offering that gives businesses access to in-office group ordering and corporate catering.

DoorDash Delivery Fees and Commissions

Like most delivery platforms, DoorDash doesn’t openly publish precise commissions or fees. However, it seems that most DoorDash commissions fall around 20-25% of total order value, though some restaurants have reported upwards of 30%.

DoorDash Tech and Integrations

DoorDash’s robust API integrates with a wide variety of POS systems and order aggregators, including… 

  • Toast POS
  • Square POS
  • Shift 4 Payments
  • HungerRush
  • Order Aggregators (Ordermart, ItsACheckmate, Chowly)

If you’re on a POS with a wide reach, you shouldn’t run into any integration problems.

Postmates Delivery for Restaurants 101

Postmates, another delivery giant, was recently purchased by UberEats for a whopping $2.65 billion. The platform already boasted a notable 8% market share in 2020, but as the delivery service inevitably incorporates with the larger UberEats, the collective market share will equal roughly 37% of the market.

Currently, Postmates operates restaurant delivery in 3,500 cities across the U.S. and Mexico with over 75,000 participating businesses (mostly restaurants).

The Postmates app and service will continue to run independently of UberEats, though it’s likely the two services will share resources eventually to create greater reach.

What’s It Like to Be a Postmates Partner?

Postmates restaurant partners experience a user-friendly and simple delivery and takeout platform. Customers who use Postmates are likely to spend more than the average delivery customer, with 17% of orders being over $50 in value, second only to DoorDash.

Postmates has a rather large set of offerings:

  • Delivery Fulfillment
  • Customer Takeout
  • Group Ordering
  • Postmates Fleet
  • Postmates for Work
  • Postmates Party

Postmates Fleet is the company’s white-label offering. Restaurants can tap into Postmates’ existing network of delivery drivers and technology to create an ordering experience that’s fully branded, and not clearly fulfilled through a third-party app.

Postmates for Work offers businesses incentives to provide food to employees, whether they’re working from the office or at home. Unlike with most platforms, employees can choose what restaurant to order from individually, making this less akin to corporate catering and more like individual ordering (as a benefit to employees).

Postmates Party is a way for customers to order food from trending restaurants, then Postmates waves those customer delivery fees (they still generate revenue from menu and service fees). If you’re a high-volume delivery location, this unique service could be a helpful way to ride the wave of peak order times.

Postmates Delivery Fees and Commissions

Postmates, like most services, doesn’t publish precise fees or commissions, though from surveys we know that most restaurants land between a 15% and 30% fee on the total order value, with the average presumably being on the higher end of that range.

Postmates Tech and Integrations

Postmates has a diverse set of integration partners, including… 

  • Square POS
  • Shopify
  • Olo
  • Order Aggregators 

If you use one of the larger POS platforms, you shouldn’t have any problem.

Grubhub Delivery for Restaurants 101

Once the clear market leader, Grubhub has been pushed to the middle of the pack with 17% market share in 2020. 

Though, as one of the oldest third-party delivery platforms, they also have one of the most expansive, with 200,000+ restaurant partners across 4,000 cities. Though customers are experimenting with newer apps, Grubhub’s reach is still quite substantial.

Grubhub has acquired a variety of smaller delivery platforms over the years, including Seamless, Yelp’s Eat24, and OrderUp. Some platforms, like Eat24, were fully absorbed in Grubhub, while others, including Seamless, have remained independent operations that share resources with the Grubhub brand.

What’s It Like to Be a Grubhub Partner?

Grubhub has spun up a variety of products and services for restaurants in the company’s long, 20-year history of acquisitions and growth, including… 

  • Delivery Fulfillment
  • Customer Takeout
  • Grubhub for Work

Grubhub for Work is the platform’s answer to corporate catering, offering businesses a convenient way to buy food for the whole office (minimum orders of $150). It’s unclear how this offering will evolve as more people work from home long-term.

Grubhub Delivery Fees and Commissions

Grubhub acted as the food delivery industry’s only guinea pig for over a decade, experimenting with business and pricing models at a rapid pace. Some less-than-honest pricing and commission strategies were scandalous, earning the brand a plethora of negative coverage and public distrust.

To rebuild trust, Grubhub appears to be clear about its fee structure for restaurants on its website—even going as far as to walk you through what a Grubhub bill looks like—though the brand still doesn’t publish precise numbers, since they depend on contract types and terms. 

Grubhub’s base commission is over 15% plus $0.30 per order, though you’ll likely end up with a more standard commission of 20-30% of total order value once you’ve added a few bells and whistles.

Make sure to read your contract very carefully. Grubhub has still been under fire in 2020 for weird fees and unexpected charges, like billing restaurants for phone calls.

Grubhub Tech and Integrations

Grubhub’s technology integrates well with most major POS providers, including… 

  • Toast
  • Upserve
  • Square
  • Order Aggregators 

UberEats Delivery for Restaurants 101

UberEats, the food delivery wing of Uber, takes up a wild 29% of the restaurant delivery market share (37% with the purchase of Postmates) in the United States. 

However, with an already-active fleet of drivers across the globe, UberEats was quickly able to expand to over 6,000 cities across 45 countries, making it one of the largest services globally—and they’re still quickly growing.

What’s It Like to Be an UberEats Partner?

UberEats restaurant partners have access to one of the most expansive driver networks in the world, which has led to UberEats boasting the fastest delivery time (35 minutes and 31 seconds, on average) among U.S. competitors.

Restaurant partners have access to a handful of services:

  • Delivery Fulfillment
  • Customer Takeout
  • Self-Delivery
  • Uber Marketing

Self-Delivery is a new service by UberEats that allows restaurants to supply their own delivery drivers, while still using the UberEats customer network and ordering technology. It’s essentially the ability to participate in the marketplace, though you’ll have to handle all delivery operations internally.

Uber Marketing is a unique offering that allows restaurants to advertise to customers who are using the Uber rideshare app. While most third-party platforms have some type of in-marketplace marketing, this is the only one that gives you access to users of a different app.

UberEats Delivery Fees and Commissions

UberEats notoriously has some of the highest restaurant fees in the business, frequently reaching as high as 25-30% of total order value for delivery (prior to the coronavirus pandemic, fees could reach 35%) and 15% for pickup or Self-Delivery.

UberEats also has a one-time activation fee of $350 that includes a welcome kit, restaurant software, a brand new tablet, and a professional photoshoot.

UberEats Tech and Integrations

Integrations are a dime-a-dozen with UberEats, including many international POS and order aggregators. Though with a wide global reach, UberEats appears to be missing many of the smaller regional POS providers that other platforms focused on the U.S. may integrate with.

Delivery.com for Restaurants 101

On top of restaurant delivery, this smaller service offers corporate catering, alcohol, groceries, gifts, and even laundry. Delivery.com aims to be a one-stop-shop for lifestyle delivery, though restaurant delivery leads the platform with over 12,000 restaurant partners across 200+ cities, a relatively small but growing number. 

What’s It Like to Be a Delivery.com Partner?

Delivery.com paints itself as working with local communities, rather than around them. 

  • Delivery Fulfillment
  • Customer Takeout
  • Delivery.com For Office

Delivery.com For Office is a flexible approach to corporate catering, allowing businesses to (1) order food for a large group, (2) allow individuals in a group to customize their particular order, or (3) offer restaurant delivery as a perk to individuals both at home or in the office.

Delivery.com Fees and Commissions

Delivery.com charges restaurants a commission of just 17.25% + $0.25 per order. With some of the lowest base fees in the industry, Delivery.com appears an attractive option for price-sensitive restaurants who want a low-risk way to dip their toes into the delivery game. 

Delivery.com also has a growing list of marketing opportunities both in and out of home to help smaller businesses stand out and compete locally. Prices for these services are not published.

Delivery.com Tech and Integrations

This service features a formidable set of integrations, including… 

  • Chowly
  • Olo
  • Order Aggregators

Caviar Delivery for Restaurants 101

Caviar is a smaller, yet beloved service that prioritizes premium local restaurant partners over larger chains. The restaurant delivery service operates primarily in East Coast metros, parts of California, the Pacific Northwest, and the Dallas/Fort Worth area.

Caviar was acquired by DoorDash in 2019 from Square POS, giving the brand an avenue for grand expansion via shared resources, though the brand will continue to operate independently from DoorDash.

What’s It Like to Be a Caviar Partner?

Caviar’s restaurant partnership page automatically redirects to DoorDash, and restaurant partners report that the overall experiences are starting to feel similar: easy and smooth to use.

Restaurants that sell on Caviar have a pretty standard set of opportunities, including… 

  • Delivery Fulfillment
  • Customer Takeout
  • Caviar for Business

Caviar for Business is an identical service to DoorDash for Business, offering businesses access to in-office group ordering and corporate catering.

Caviar Fees and Commissions

Caviar takes a hefty 30% of the total order value as commission.

Caviar Tech and Integrations

Caviar is relatively low on direct POS system integration opportunities (originally owned by Square POS, that’s an integration you can count on), but the service functions well with order aggregators.

How to Survive High Commissions and Fees

If you’re like most restaurants, a 30% commission on every order probably sounds unsustainable. With high food and labor costs, it’s not possible for many restaurants to sell food profitably at the upper end of commission structures.

Some cities have legislated fee caps to help reduce the strain on restaurants, but most owners and operators are left to work out the numbers on their own—a challenge that can feel insurmountable. 

  • Ingredient prices change regularly
  • Delivery fees differ from platform to platform
  • Competition is still raging in most of the country

How are you supposed to measure if you’re profitable with all that information? And how can you adapt your operation to increase margins to a sustainable level if you’re close to break-even when fees are factored in (like most restaurants)?

We created the Food Delivery Margin Maximizer to give you actionable strategies to increase margins on delivery orders so you can make third-party delivery profitable during the pandemic and beyond.

In the guide, we cover things like… 

  • Quick ways to calculate food cost percentage and profit margin
  • How to re-engineer your existing menu for higher margins
  • Strategies for drawing customer attention to your most profitable items

This is a quick, essential resource you can read through in minutes, then apply to your own business.

GET THE DELIVERY MARGIN MAXIMIZER

Cover photo by eggbank on Unsplash

Continue reading

Our newsletter

Get great curated articles every week.

Combine sections from Ollie's vast component library and create beautiful, detailed pages.

Interested in joining the Galley team?