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How Restaurants Lose Money With UberEats & Doordash?

The restaurant industry is constantly evolving, but the presence of delivery services such as UberEats and DoorDash have raised some questions about whether restaurants are losing money with these services. 

It turns out that some restaurateurs believe they are actually making more money with these services than they would without them.

But this is only a half truth. The full truth is, restaurants could make even more money by surpassing UberEats and DoorDash with something similar that doesn’t keep its commission. 

So, Yes Restaurants are losing money with UberEats and DoorDash. 

The articles reveals how. 

And yes, there’s a feasible solution discussed too.

 

How does UberEats/DoorDash work?

In this world of ever-evolving technology, UberEats / DoorDash has made it very convenient for people to receive delicious and fresh food in just a few clicks. 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 commissions charged by UberEats are 30% service fees on orders from restaurants which is a lot, but this is applicable only if the delivery staff is managed by them. 

Restaurants are offered a 15% concession if the delivery staff is managed by them and in case any customer decides to pick up the order by themselves. The 15% spent on delivery eventually gets converted to the profit for the restaurant. DoorDash charges anywhere from 7% to 15% delivery charges per order.

 

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 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

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.

 

Final Words

So we hope that now you have understood every term about UberEats and restaurants’ business models. It is very useful for both parties to grow in this cut-throat competition era. 

Ultimately if the power of technology is used for consumers and business models only then growth can occur. If you have any doubts regarding the Foodship working module feel free to ask them in the comments section below.

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