The restaurant industry is constantly evolving in every corner of the world, from the US, Australia and Europe to developed countries in Asia like South Korea, we all have experience the convenience of firing up a mobile app and having a delicious meal delivered straight at our doorstep but these new age delivery services like Uber Eats and Door Dash have a dark side for the restaurant owner.

Many restaurant owners in US, Australia and South Korea has a misconception that these delivery services has open an another revenue stream for their restaurant. These delivery services offer undeniable convenience to restaurants owners as they don’t have to maintain a fleet for delivery services and they can concentrate on restaurant operation rather than delivery management but the fact is these services has a hidden cost for restaurant that can significantly impact restaurant profits in USA, Australia and South Korea.

In this blog we will dives deep into the world of food delivery apps of Uber Eats and Door Dash and explores the double-edged sword they present for restaurants. We’ll uncover the hidden costs that can eat away at restaurant profits, and discuss a potential solution that empowers restaurants to take back control.

How does UberEats/DoorDash work?

In this world of ever-evolving technology, UberEats and DoorDash follow a similar business model in Australia, US and South Korea that connects customers with restaurants through a convenient app-based platform. The procedure starts when a customer places an order for food online through the UberEats/DoorDash app. 

The registered restaurant receives the order that has listed the food item on UberEats/DoorDash. After receiving the order the restaurant prepares and packs the food in their kitchens which is then collected by the delivery man. 

The delivery man delivers the order to the customer at their doorstep as soon as possible. Payment is done either online through UPI, credit cards, or debit cards.

How much does UberEats / DoorDash charge restaurants? 

The biggest bite out of a restaurant’s profit on delivery orders comes from the commissions charged by UberEats and DoorDash. These platforms take a hefty commission cut on every order placed through their apps. Typically, this commission rate falls around 30%, meaning for every $100 order, the restaurant could be losing $30 just to get their food delivered to their customers.

Let’s do the math. Imagine a restaurant with a healthy 10% profit margin on a $200 takeout order. Without a delivery service, they pocket a neat profit of $20. But factor in a 30% commission to UberEats or DoorDash, and that profit shrinks to just $4. On low-cost orders, the commission can completely wipe out the restaurant’s profit margin, leaving the restaurant fulfilling orders at a loss.

Is UberEats / DoorDash worth it for restaurants?

The food industry is one of the most profitable industries. A margin of more than 60% in some cases can be achieved.

If the restaurant provides their food with a decent margin, giving a slice of 30% of every order to UberEats won’t affect their profit.

For small startups like food truck and new restaurants that provide their service for small margins, UberEats / DoorDash might not be much profitable. 30% commission is a lot for them and at the end of the day if there is no significant profit then it will result in a waste of time and energy.

UberEats indirectly markets the restaurant by displaying its name when someone orders food. But this marketing is not enough to attract new clients to the restaurant because UberEats does not recommend any particular dish from a specific restaurant.

Charging 30% for online service also comes along with its own profits. It is observed that people are more comfortable ordering food online because it saves time and energy for them. Sales are exponentially increased through online platforms, especially during pandemics and rainy seasons.

We promised a feasible solution and that is Foodship.

What is a Foodship?

Foodship is an online food ordering system that provides multiple tools to make it easy for restaurants and cafés to manage multiple things through a common channel. They charge absolutely no commission for online food ordering in cafés and restaurants. 

 The additional tools and services that they provide include

• Table reservation systems

This system is synced with the table reservation management system which enables the customers to book a table online in the restaurant. It can also be connected to Google’s Proprietary Book A Table Button so that the customers can directly be led to your table reservation system.

• SEO Friendly Website

Foodship provides a free website and web hosting service for your café and restaurants

• Gift card system

It is a very effective method to improve the revenue for the business. Customers can buy them to gift to others. Restaurants can provide complimentary gift cards to unhappy customers to keep them motivated to visit again. These gift cards can be redeemed by ordering food online or by restaurant staff mobile app for dine-in customers. Management and the detailed reports are also generated which provide the information about the gift card buyers and redeemers

• Order receiving Mobile app for staff

A dedicated app is provided to the restaurant staff so that they can access all the essential information about reservations, food orders, and gift cards at one place. With a one-touch response, they can accept or decline a reservation

• QR Code ordering system also known as table ordering system. 

A system where customers can scan a QR code to access the restaurant menu, order the food and pay for it using just their mobile phones when dining in. so customers dont have to wait to place orders. 

• Loyalty Points System

The loyalty point system is reward points provided by restaurants to increase customer loyalty and motivate them to visit or order from the restaurant again. The restaurant can customize the details like who and when can one receive the reward points, what will be its value and when can they redeem it.

How Foodship is different from UberEats and DoorDash?

Foodship is an online restaurant food ordering system 

Although it might look similar, Foodship is significantly different from UberEats and DoorDash. The main difference is that Foodship is a restaurant ordering system that comes along with tools that can be used to track and execute both online and dine-in orders right from the reservation of the table to ordering food and payment. Whereas UberEats and DoorDash only deal with online food ordering and their delivery.

Foodship helps restaurant build their own website and to take orders online

UberEats/DoorDash does not provide any separate website for the restaurants; it is a place where they list out all the food items that they sell. This eventually converts the client into their customer rather than restaurants.

Foodship provides a separate website with an online menu for the restaurants and cafés which customers can use to order food online, reserve tables, or buy gift cards for no extra charge. Here an exclusive website provides a strong presence as a brand for a restaurant and the client is converted to a customer for that particular restaurant. Here an exclusive website provides a strong presence as a brand for a restaurant and the client is converted to a customer for that particular restaurant. 

Foodship has a fixed and affordable subscription model charged annually or monthly

Foodship services come with a subscription-based model where a basic flat cost is charged every month for their service irrespective of the number of orders and the revenue that the restaurant generates. UberEats / DoorDash charges 7% to 30% commission on every order.