Can I Sell for More on Uber Eats Than I Sell at the Restaurant?
For restaurant owners looking to partner with a reputable third-party food delivery service, Uber Eats is a popular choice. Fueled by the Uber company, best known for its inventive ride sharing service, the brand is recognizable and beloved by consumers. As for its food delivery counterpart, approximately 60% of operators report that the partnership has generated increased sales and a 77% rise in food delivery services is expected by 2022. Although partnering with Uber Eats is a fast and straightforward process, many restaurant owners have questions regarding menu pricing on the platform. The most common being, “can I sell for more on Uber Eats than I sell at the restaurant?”.
Partnering with any third-party food delivery services comes with its own set of costs. With Uber Eats, restaurants can expect to pay in two parts. First, restaurants pay a one-time fee that covers the costs of activation. This fee includes a full welcome kit, a tablet, restaurant software and a professional photo shoot. The cost is a flat rate of $350 and enables restaurants to launch their menus on the Uber Eats platform. The second part, in terms of cost, is known as marketplace fees (or service charges). These charges are incurred each time a restaurant receives an order that was placed through the platform. The fee: however, will vary depending on how the order is fulfilled. When a user places an order that is fulfilled using an Uber Eats driver, the fee is 30% of the total bill. For restaurants who deliver using their own delivery staff, the fee drops to 15% and remains the same if the customer picks up their own orders. These fees aid in covering the costs of exposure, credit card processing fees, customer support, sales data and customer insights.
To help offset these costs, many restaurant owners question if they can raise their menu prices on the platform without raising them on their regular, in-house restaurant menu. The short answer is yes, you can charge more on Uber Eats than you do in your restaurant. Uber Eats allows restaurants to set their own menu prices through the platform and most restaurants do opt to charge a higher price to cover the service fees and improve their margins. In fact, studies have shown that the markup on orders placed through Uber Eats for customers is as high as 91%. Despite this, Uber Eats encourages restaurants to keep their prices in line with regular menu prices.
If you do opt to charge more on Uber Eats than in your restaurant, the fees can be quite a shock to customers who are already shelling out the cost of delivery fees and driver tips. This is especially true when it comes to loyal patrons who are accustomed to paying the lower, regular menu prices or when restaurants are partnered with multiple food delivery services that each offer different prices. While some may opt to pay the added fees for the added convenience, others may frown upon the inflated prices and may opt to order pickup instead or order from a different restaurant entirely. In either case, if your prices will be higher through Uber Eats it is crucial to keep the prices relatively close to those in the restaurant and above all, to be transparent with customers.
Already partnered with other food delivery services and want to add Uber Eats to your restaurant? Consider a point-of-sale integration app like OrderOut to streamline the process of accepting third-party food delivery service orders and to keep tabs on which partnerships are improving your bottom line and which are costing more than they are worth.
