Incessant Fee’s, tip pandering, and Shrinkflation

[Rich Konopka]

I went to order Chinese takeout for the family from doordash. Wow!! We do not do delivery but had company over and didn’t feel like going out to get it. The order came to $89 for 2 menu items and fried rice. Nope, not going to happen. The order came to $51 when I picked it up at the restaurant. $38 in fees and suggested tip. Whoa 🤯 oh, and when I am picking and paying for the takeout they ask me for tip for the kitchen staff.

I get home and I noticed that the restaurant changed its containers to smaller sized containers. Talk about Shrinkflation.

It’s crazy how ridiculous it has gotten with excessive fees, over zealous tip pandering, and Shrinkflation in one’s quest for Chinese takeout.

I curious how extreme it has gotten. what have you experienced?

Btw, I noticed that Doordash’s suggested tip algorithm also encompasses the fees & taxes when suggesting a tip. I always the tip is calculated based on food and drinks??

[Keegan Shields]

I refuse to use any delivery apps like Doordash, Grubhub, and UberEats. Not only do they charge you for the delivery, they also screw the restaurant out of most of their margin. No thanks.

The restaurant business is hard enough without these companies inserting themselves as middlemen.

https://www.saddlebackbbq.com/pages/...al-restaurants

[Brian Runau]

We don't use delivery even on pizza anymore, if we are unwilling to go get it we don't have it. Reviewing 2023 expenses for 2024 budget. I’m thinking @ 25% increase post pandemic. Suggested tip at great clips is $5 on a $16 hair cut. I don’t tip at self serve restaurants, only when I sit and you take my order, but we are eating out less due to cost. Brian

[Bill Howatt]

People seem to forget that if the price of the meal has increased (and they certainly have) then tips based on percentage are automatically scaled up. I didn't mind tipping a bit extra when business was in the doldrums because of the pandemic. I will tip at buffets if I'm getting good, friendly service for drink replacement, plate removal, whatever. I do tip my barber well because she is very pleasant, interested in my well-being and I don't keep my hair well trimmed so she probably has to do a bit more work when I finally show up. If you want a decent tip from me, along with good service, you have to be friendly and make me feel I'm happy to be there.

[Jim Becker]

It should not be surprising in the least that the added cost for services like DoorDash, InstaCart, etc., are what they are. The folks making the deliveries have to make a living and the companies that run the platforms expect to earn money, too. I personally do not use the services. Oh, ok...DD once but that was for something from PetSmart and the service was free that day. (I did tip the dude $5)

I honestly don't do takeout either, but that's simply because I like my food fresh. I either cook it or we go out to eat once or twice a week. There are two or three places we've wanted to try, but they remain takeout only so, well...nope.

[Doug Garson]

We have been using Skip the Dishes about once a week for the last two years. Usually Saturday night after we both volunteer at a food bank and are too tired to cook. It also gives us the opportunity to try a variety of local restaurants in the comfort of home. Our order is always over the minimum for free delivery, we just tip the driver. I disagree with the criticism that they cut into the restaurant's margin. The delivery company charges a fee to the restaurant in return for a service (they don't touch the driver's tip) and they probably increase the restaurant's revenue with higher volume. If the restaurant wasn't increasing their net revenue by using the service they would stop using the service. I figure the tip we pay the driver is worth it so we don't have to drive to the restaurant and the driver probably needs the few bucks more than we do. My 2 cents worth.

[Keegan Shields]

I disagree with the criticism that they cut into the restaurant's margin. The delivery company charges a fee to the restaurant in return for a service

That’s what I thought Doug, until I read up on the topic. The core of the problem the disparity in size. Large corporations like DoorDash etc against small restaurants with no negotiating power.

Keep squeezing the mom and pop restaurants and they will go out of business, leaving your area with only fast food and cheap restaurant chains.

At the end of the day, it’s up to each person to decide where your priorities lay. Just trying to help others make an informed decision. If I’m paying $40 for takeout, I’d rather spend it all with the business who actually made it.

[Doug Garson]

That’s what I thought Doug, until I read up on the topic. The core of the problem the disparity in size. Large corporations like DoorDash etc against small restaurants with no negotiating power.

Keep squeezing the mom and pop restaurants and they will go out of business, leaving your area with only fast food and cheap restaurant chains.

At the end of the day, it’s up to each person to decide where your priorities lay. Just trying to help others make an informed decision. If I’m paying $40 for takeout, I’d rather spend it all with the business who actually made it.

To be fair, I haven't researched this topic much other than looking into whether Skip the Dishes takes a cut from the drivers (they don't). Don't know about the delivery services in the US, my research says Skip charges 11% to the restaurant in return for providing a delivery service that includes a website that lets customers view the full menu (with up to date data when items are unavailable) and place a order complete with instructions to the kitchen like food allergies etc.) Coordinates a fleet of drivers to match a driver with the restaurant and the customer so there is a driver at the restaurant to pick up the order when it is ready. Don't know if a small mom and pop restaurant could (for 11%) or would want to take that on and provide as efficient a service to the customer.

I'd be interested to hear which reading lead you to the conclusion you reached.

[Bill Howatt]

FWIW, Bing AI said DoorDash offered 15-30% plans to restaurants and the average (or maybe, typical) was 20%. Few months back there was newspaper article about how the restaurants in the pandemic were squeezed by delivery services.
In general, though, it all boils down to convenience for the end-user and maybe these services provide enough value-added to make it worthwhile for a business to pay the charge.

[Frederick Skelly]

I don’t use delivery services, but my neighbor often has DoorDash bring them a dozen donuts on Sunday AM. Seems crazy to me, but …

[Stan Calow]

Shrinkflation: its been going on forever but I still fume over it, as I'm looking at my breakfast oreo cookie which seems to be half the size it used to be and with hardly any filling. I blame the ignorant buying public who don't look and don't know a pound is 16 ounces, not 12 (bacon) or 13 (coffee), and can't count or calculate value. Marketing is a science and they know how to use our weaknesses against us. I don't blame companies for wanting to make money, but people for being unwilling to learn basic math.

Tip-flation: Everyone expects, even demands, tips for doing nothing significant. Guilt-tipping is the new term, as nobody actually tips based on quality of service, just fear of being disliked. And I remember when it was pre-tax amount, but that idea disappeared. Yes, self-service concessions at the ballpark, where the only thing a human does is hand me a hotdog, and I'm supposed to tip? It's a ridiculous custom, to subsidize labor costs. Why cant we just expect businesses to pay their workers? The pandemic was/is used as an excuse to bump up tip expectations. Now it's permanent, and everywhere. Pandering for tips? I dont mind tipping for helpful service, but I value professionalism and efficiency over false friendliness and hovering. I dont need you to be my friend, just get my order correctly.

Delivery: the only food I have delivered is from my local pizza shop. The fewer people handling my food, the better. If I need McD's that badly, I can get off the couch or plan my day better. The grocery delivery services I can understand. I think the trend to cashless transactions means some people have learned to not see the cumulative effect of all these small purchases, because they dont see the cash leaving their hand. And mom & dad pay off the credit card, so it's not real money.

[Keegan Shields]

I'd be interested to hear which reading lead you to the conclusion you reached.

Sure, lots of interesting articles on the topic are available. Here is a well written one from 2021:


https://www.newyorker.com/culture/q-...-delivery-apps

with a nice quote:

"I was the former Head of Innovation at Grubhub, so I have seen the truth behind many of these claims first hand. Sadly, I invented a lot of the food delivery technologies that are now being used for evil. … COVID-19 is exposing the fact that delivery platforms are not actually in the business of delivery. They are in the business of finance. In many ways, they are like payday lenders for restaurants and drivers. They give you the sensation of cash-flow, but at the expense of your long term future and financial stability. Once you “take out this loan” you will never pay it back and it will ultimately kill your business."

[glenn bradley]

I think of these types of delivery services the same way I think of lumber prices at Rockler and Woodcraft. This is a convenience service and you pay a premium. We need to decide in each instance if the price is worth the benefit. We tipped at our local restaurants during COVID since we felt bad for the familiar wait staff who were used to receiving that income. We don't normally tip for take out . . . local or not.

[mike stenson]

I have a couple friends who own restaurants, and don't allow food delivery pickups. Because of the above.

[Jim Becker]

That’s what I thought Doug, until I read up on the topic. The core of the problem the disparity in size. Large corporations like DoorDash etc against small restaurants with no negotiating power..

I agree. A number of local restaurants are actively begging folks to order directly and either pick up or have restaurant personal deliver because of the fees from the gig-company delivery servce that can sometimes reach up to 30% of the cost of a meal. Profit margins are hit hard which makes it more difficult for the eateries to invest in their businesses.