Uber Eats charges up to 30% commission per order, cutting into restaurant profits.
In this article, I will explore ways to reduce reliance on third-party platforms like Uber Eats, including building your own ordering system and using your own delivery drivers to keep more of your restaurant revenue.
Key Takeaways
- High commission fees: Uber Eats charges up to 30% commission per order, significantly reducing restaurant profit margins.
- Build your brand: A dedicated restaurant website and mobile app help reduce dependence on third-party platforms and increase customer loyalty.
- Don’t rely solely on Uber Eats: Set up your own online ordering system on the restaurant website to reduce costs by up to 90%.
- Reduce costs: How is it possible to reduce costs by 90%? By using an online ordering system like UpMenu, you pay a fixed price for unlimited orders instead of paying for each order commission and additional fees
- Promote direct orders: Include flyers with a QR code menu in Uber Eats orders that direct customers to your website with a discount on their first order.
- Lower delivery costs: Use your own delivery drivers instead of Uber Eats couriers to reduce platform commission fees. Keep your fleet organized and running smoothly with a driver app.
- Third-party delivery services: If you don’t have your own driver fleet, you can outsource deliveries to third-party delivery services like UberDirect, WoltDrive, or DoorDash Drive to reduce reliance on Uber Eats.
- Avoid marketplace dependence: Uber Eats can increase order volume but also make restaurants reliant on its ecosystem, limiting control over customer relationships.
What is Uber Eats?
Uber Eats is a food delivery service that allows users to order food from local restaurants using the mobile app or Uber Eats website. The service is available in many countries worldwide and delivers food using Uber delivery partners.
Users can track their deliveries in real-time and pay for their orders using the payment method linked to their Uber account.
How does Uber Eats work?
Uber Eats connects customers with local restaurants via an app or website for delivery or pickup. Once an order is placed, the restaurant prepares the food.
Restaurants can either use their own delivery drivers (which may lower the delivery fee) or work with Uber Eats drivers. Payments are made through the app, and customers can leave ratings and reviews.
How to Reduce Uber Eats Commissions?
Based on my experience with restaurants in the past 6 years, I briefly described the 5 ways to reduce Uber Eats commissions.
1. Use online ordering system
Take orders directly from your own website and restaurant mobile app to save on commissions.
Helpful articles to get started easily:
2. Promote direct ordering
Promote your own ordering channel to Uber Eats customers with the help of restaurant marketing tools so clients on Uber Eats order directly from your restaurant website. Treat your Uber Eats account as an additional source of online orders, not your main one.
3. Negotiate lower commission
Contact an Uber Eats representative to see if your business qualifies for a lower commission rate. This can help you avoid raising menu prices to cover growing fees.
4. Deliver with your own drivers
Build a fleet of your own drivers to offer your own delivery service, reducing platform commission fees. Use restaurant delivery software to manage all delivery orders in one place. Here you can read more about what is delivery management software.
5. Use third-party delivery services
Instead of relying solely on the Uber Eats platform, outsource deliveries to services like UberDirect, WoltDrive, or DoorDash Drive for on-demand delivery. This will allow you to maintain more control over your delivery process while keeping costs lower.
What Are Alternatives for Uber Eats?
There are several alternatives to Uber Eats when it comes to online food ordering that may have lower service fees for businesses. Some options include:
- UpMenu
- DoorDash
- ChowNow
- Grubhub
- Caviar
| System | Uber Eats | UpMenu | DoorDash | ChowNow | GrubHub | Caviar |
|---|---|---|---|---|---|---|
| Commissions | Starting from 15% | No commission fees | Starting from 15% | $199 monthly and $1.19 + 2.95% per order | Starting from 10% | Starting from 30% |
| Free Trial | ||||||
| Setup Service | £650 (UK) N/A (USA) | Free | Free | $119 – $499 | $99 one-time + $49 monthly | Free |
| Customer data ownership | ||||||
| Your Own Branded Mobile App | ||||||
| Your Own Website With Ordering | ||||||
| Control Over Marketing Activities | ||||||
| Delivery Service | Yes, with third-party services |
SOURCES: Uber Eats Pricing, DoorDash Pricing, GrubHub Pricing, ChowNow Pricing
In recent years, our clients have saved millions of dollars in commissions by using UpMenu as their primary online ordering solution.
Just check out these numbers:
- Sushi Kushi – More than $1,500,000 in savings
- Michelangelo 301 – $129,474 in savings
- Dedicate Healthy Kitchen – $118,397 in savings
Discover more case studies and learn how to achieve these results in your restaurant!
How Much Does Uber Eats Charge Restaurants?
Uber Eats typically takes between 6% and 30% in commission fees from restaurants. In addition to this, restaurants may also incur payment processing and service fees, which can further impact their earnings from each order.
In general, Uber Eats charges a percentage of the total sale as a commission for each order placed through the platform.
Here are the plans you can choose from:
- Lite: The Lite plan offers a lower Uber Eats commission rate of 15% of the total order value for delivery orders and 6% for pickup orders. This plan is a low-cost way for many restaurants to save money and join the Uber Eats platform.
- Plus: The Plus plan comes with a significantly higher commission rate of 25% of the total delivery order value. This plan offers more exposure to potential customers on the Uber Eats app. For pickup orders, you will pay 6%.
- Premium: The Premium plan takes a 30% commission fee from the total delivery order value, places your business higher in the Uber Eats app, and matches extra ad spend up to $100. You will also pay 6% of the order value for pickup orders.
You will also need to pay the 2.5% order processing fee + $0.29 per order.
What is the Uber Eats Commission Rate?
The commission rates of Uber Eats depend on the plan selected by the restaurant.
For pickup orders, the platform charges restaurants 6% of each order. For delivery orders, the commission rate depends on the plan selected and ranges from 15% to 30%.
Below are example calculations of Uber Eats’ commission rate for different plans offered by the platform. For the purpose of these calculations, we assumed that a restaurant fulfills 100 orders per month with an average order value of $50.
| Plan Type | Order From Uber Eats (Monthly) | Average Order Value | UberEats Commission Rate | Uber Eats Processing Fees | Total Orders Value (Monthly) | Remaining Revenue (Monthly) |
|---|---|---|---|---|---|---|
| Lite | 100 | $50 | 15% | 2.5% + $0.29 | $5000 | $4124.71 |
| Plus | 100 | $50 | 25% | 2.5% + $0.29 | $5000 | $3624.71 |
| Premium | 100 | $50 | 30% | 2.5% + $0.29 | $5000 | $3374.71 |
SOURCE: Uber Eats Pricing
How Does Uber Eats Calculate Fees for Restaurants?
Uber Eats’ restaurant fees are calculated using a commission system. The restaurant pays Uber Eats a percentage of the total order value for using its platform to reach customers and facilitate delivery.
Depending on the plan the restaurant chooses, the commission fee typically ranges from 15% to 30%. The commission fee is calculated as follows:
- For delivery orders: The commission rate varies by plan, with fees ranging from 15% to 30% of the total order value.
- For pickup orders: Restaurants are charged a fixed rate of 6% of the total order value.
In addition to the commission fee, restaurants may also be required to pay other fees associated with using the platform, thus increasing Uber Eats’ order cost. These can include:
- Delivery fee: Restaurants may be required to pay a fee for each Uber Eats order delivered by a driver.
- Marketing fee: Restaurants may be required to pay a fee to participate in Uber Eats’ marketing campaigns or promotions.
Uber Eats vs. Grubhub vs. Doordash Commissions
| Platform | Plan Type | Orders From Platform (Monthly) | Average Order Value | Delivery Commission Rate | Pickup Commission Rate | Processing Fees |
|---|---|---|---|---|---|---|
| Uber Eats | Lite | 100 | $50 | 15% | 6% | 2.5% + $0.29 |
| Uber Eats | Plus | 100 | $50 | 25% | 6% | 2.5% + $0.29 |
| Uber Eats | Premium | 100 | $50 | 30% | 6% | 2.5% + $0.29 |
| DoorDash | Basic | 100 | $50 | 15% | 6% | 2.9% + $0.30 |
| DoorDash | Plus | 100 | $50 | 25% | 6% | 2.9% + $0.30 |
| DoorDash | Premier | 100 | $50 | 30% | 6% | 2.9% + $0.30 |
| Grubhub | Marketplace | 100 | $50 | 5%-20% | N/A | 3.05% + $0.30 |
| Grubhub | Grubhub Direct | 100 | $50 | 10% | N/A | 3.05% + $0.30 |
Given the average order value of $50 and the number of orders that is 100, a restaurant receives through a given platform, you can calculate the monthly cost a restaurant incurs using that solution.
The commission rates across these food delivery apps are similar, but GrubHub Marketplace appears to be the cheapest option.
I’ve provided a calculation of the costs of using GrubHub Marketplace for a restaurant below, assuming a delivery commission rate of 5%.
1. Delivery Commission Formula
Delivery Commission = Number of orders x Average order value x Delivery commission rate
Example: Delivery Commission = 100 x $50 x 5% = $250.00
2. Payment Processing Fees
Processing fee rate: 3.05%
Processing fee per order: $0.30
Processing Fees = (Number of orders x Average order value x Processing fee rate) + (Number of orders x Processing fee per order) = $182.50
Example: Processing Fees = (100 x $50 x 3.05%) + (100 x $0.30) = $182.50
Total Cost Calculation
Total Cost = Delivery Commission + Processing Fees
Total Cost = $250.00 + $182.50 = $432.50
Thus, the total cost for Grubhub Marketplace is $432.50.
As you can see, the monthly cost charged by GrubHub Marketplace is $432.50, making it the cheapest option among those listed in the table above.
However, it’s important to note that using your own online ordering system is still cheaper than relying on third-party services.
For example, UpMenu offers three plans, depending on the number of monthly orders. The Standard plan, which would be perfect for a restaurant like the one in our example calculation with 100 monthly orders, costs $89 per month—still cheaper than the solutions mentioned.
Why Are Uber Eats Commissions So High?
Uber Eats is a high-demand platform with a large user base and intense competition among restaurants.
Restaurants pay high commissions to access this customer base and gain visibility on the platform. To improve visibility further, restaurants often need to pay additional fees.
Additionally, Uber Eats, as a subsidiary of Uber, shares costly infrastructure and technology with Uber, which increases operational expenses. It also employs its own drivers for deliveries, adding to the costs passed onto restaurants.
Finally, Uber Eats indirectly markets itself while promoting restaurants, which significantly increases fees.
„As for restaurants, many hate Uber Eats. Why? Because rather than charging consumers the full cost for on-demand food delivery, they shifted a large cut onto restaurants. This only adds to our skewed perception of food costs, now also distorting the reality of what food delivery costs. Devious little devils.”
– Joelle Parenteau,
What are the disadvantages of Uber Eats for restaurants?
Below I listed the main disadvantages of Uber Eats for restaurants
- Uber Eats high fees: You’re required to pay commissions of up to 30% on each sale, meaning costs increase continuously. The more money you make on orders, the more Uber Eats takes.
- No customer data ownership: Your customer data isn’t owned by you, so you have little control over your marketing activities.
- Marketplace dependency: You are 100% dependent on the marketplace. If you decide to quit using Uber Eats, you lose all of your online orders and your listing in the app.
- Lack of control of marketing and delivery process: Uber Eats does not allow you to market to users who order through the platform due to the lack of data ownership mentioned earlier. Moreover, you can’t control the delivery process, which may affect service quality and customer experience.
Is Uber Eats worth it for restaurants?
Uber Eats can provide restaurants with a valuable source of additional revenue, increased visibility, and exposure to new customers. It also allows restaurants to expand their delivery range and reach customers who may not have previously been able to access their food.
However, there are also downsides to partnering with Uber Eats. The amount of Uber Eats fees depends mainly on the chosen plan and the business’s location.
Restaurant owners don’t own their customer data or marketing, which means they’re entirely reliant on the system.
If a restaurant owner decides to leave Uber Eats, all of their online orders and marketing activities will be lost.
Plus, marketing on the platform is done within the app, so once your business is off of the platform, you cannot reach those customers, and they cannot order your menu items off the app.
In that case, it might be wise to understand how to get more Uber Eats orders and push on.
Whether Uber Eats is a good option for your restaurant will depend on your specific restaurant goals, circumstances, and priorities. When looking for third-party food delivery services, always read the fine print and evaluate the pros and cons before committing.
