How Food Delivery App’s Keep You Broke
Convenience certainly comes at a cost.
Just admit it, you probably love the ease and convenience of food delivery apps. Life can be busy and hectic, and you just don’t have the time to go to the grocery store and prepare your food. Life can be so busy that you don’t even have time to stop by the actual restaurant.
This is when phone apps like Grubhub, Postmates, and Uber Eats come in handy. All one needs to do is open the app, choose some food, and then it shows up at your doorstep or office.
The hustle and workaholic culture of today has made it a more opportune time for delivery services such as these to thrive.
However, if you start to pay closer attention to your budget and costs (which is likely what these companies don’t want you to do), things don’t add up in your favor. Going to a restaurant in itself is an expense, but the extra fees tacked on to delivery services can very quickly eat up that extra cash in your bank account.
Here’s the actual cost to use these services, and how reducing an expensive delivery habit can save you more money in the long run.
7% to 91% markup
Depending on which service you use and what food you will be ordering, you’ll likely see a markup on anywhere from 7 to 91 percent just by using these delivery services.
These markup numbers come from a short experiment done by Brian X. Chen in a New York Times article published earlier this year.
Chen wanted to know precisely how much higher your bill would be by using the four largest delivery apps in the United States: Grubhub, Postmates, DoorDash, and Uber Eats.
He ordered the same item from the same restaurant using these four different delivery services. Here is how the costs added up:
Table by Brian X. Chen from the New York Times
There are stark differences between each of the four primary delivery services. However, every single one of them costs significantly more than compared to going to the actual restaurant. If you ordered just from Uber Eat’s, you would be paying almost double the cost compared to just visiting the restaurant itself.
If you start to make a habit of these services, it will seriously eat into your budget. Let’s say that hypothetically, someone uses Uber Eats every day for lunch during a five day work week, and orders the same Subway turkey sandwich that Brian ordered. Here is how the costs would add up:
- $126.25 per week
- $505 per month
- $6,060 per year
Keep in mind that this only accounts for lunch. These prices don’t include the price for breakfast, dinner, snacks, or any food you get over the weekend.
These costs are going to differ depending on the frequency you order and where you order. However, the average prices above may be similar to a scenario where you only get lunch delivered a few times a week and then get a more expensive food delivery item for dinner.
If you are ordering consistently at these kinds of prices, you can easily spend over $ 10,000’s of dollars just on food for yourself. This cost of food is nearly 1/3rd of the average salary for a person in the United States, according to the U.S. Census Bureau.
In research on the frequency of food delivery app usage conducted by Zion & Zion, 29% of respondents who ordered food delivery over the past three months have ordered at least five or more times. 7% of those respondents ordered 11+ times in the past three months. The study also suggests that the younger a person is, the more likely they are to use these services.
Thankfully what this means is that the possible costs listed above are not the average frequency that most people order form delivery apps. However, this doesn’t mean that these services aren’t eating away at people’s budgets. Even 7% of respondents who order 11 or more times per month are spending way more for food than they need to be.
Kicking out the delivery habit
Getting rid of the pernicious habit of ordering too much delivery can be an easy fix. One just needs to take the time in life for grocery shopping and meal prep.
When my wife and I shop, what we like to do is go shopping for food that lasts us the entire week. We plan out all the breakfasts, lunches, and dinners we will have. With a quick but comprehensive list in our hands, we gather the ingredients we need. For both, my wife and I, our average weekly grocery shopping bill comes out to about $100. Sometimes it is more, and sometimes it is less, but this is a good average for both us. Adding those costs up for the month and year looks like this:
- $400 per month
- $4,800 per year
These costs are a lot less than just ordering subway lunch for 5-days a week with Uber Eats for just yourself. If I was shopping just for myself, I could cut the above prices in half and spend on average, around $2,400 on food a year.
I would say that the prices do only reflect what we spend on groceries. Of course, my wife and I like to treat ourselves to food in a restaurant occasionally. Eating out is okay as long as your budget allows it, and is done in moderation.
Food delivery can be fast and convenient, but also surreptitiously pricey. There’s nothing wrong with the occasional food delivery every once in a while, but if it becomes a habit, the costs begin to add up.
Instead of throwing your money towards these big delivery companies, you can choose to be cost-effective in your food choices by spending more time preparing for meals, shopping local at grocery stores and farmer markets, and by supporting restaurants through picking up your meal or dining in on occasion.
When you begin to shed some of the delivery food costs, you’ll find yourself having more money in your pocket and the potential to be eating more healthy meals for a fraction of the costs. All it takes is time and the enthusiasm to make a positive change in your dining lifestyle.