Why Popular Food Delivery Apps Aren’t Profitable

Before the pandemic, food delivery apps like DoorDash and Uber Eats were niche services that were mostly popular in big cities. The COVID lockdown changed all that and food delivery apps began to gain popularity. Today, DoorDash and Uber Eats control 85% of the U.S. food delivery market. While both of these apps earned staggering amounts of money in 2020 and 2021, neither of them turned a profit. The reason is that delivery apps only pocket a small slice of the cost of each food order. As a result, DoorDash and Uber Eats have been spending a lot more on advertising and improving technology than they’ve been earning from food deliveries. The delivery apps make money by charging restaurants a commission for each order placed through the app. The standard commission is 30%, and they also charge a smaller service fee to the customer — 10% of the total order at DoorDash and 15% at Uber Eats. From restaurants to drivers to the app companies themselves, the math of food delivery doesn't seem to add up. When the "pie" of a $36 order is divided among those three entities, all of them leave the table hungry.