Getting food delivered? Tips to save money doing so

During the lockdown, a lot of us have been enjoying food from restaurants, either by taking away or getting it delivered, given that we haven't had much opportunity to eat out. We also mostly use services like UberEats or Deliveroo to do so. Here is the deal - ordering through Deliveroo or UberEats can be costly. Here is why - UberEats and Deliveroo charge you in 2 ways:
  • Delivery Charges (which is fixed at something between £2-£4)
  • Markup on the menu OR a commission on the food charges (20-40%)
None of this should be a surprise. This has been talked about in public domain quite a bit. Read here, here, here and here

Such services offer users 2 benefits
  1. Discovery
  2. Convenience
Almost all marketplaces you can think of, act the same way - think of Amazon or ebay. The effect of marketplaces increase as the network increases and it becomes more convenient to deal with the marketplace than to (a) find and (b) deal with the seller directly. I wouldn't want to be finding the manufacturer of my T-shirt (probably some Chinese company) and the negotiate a contract to get it shipped here!!



When we visited Paris 2 years back, we wanted to eat-in in our room one day, specifically enjoy some Chinese food. I pulled out Deliveroo, found a restaurant nearby and a few minutes later, we were enjoying delicious fried rice! That too without my needing to talk to anyone in French or dealing with with a restaurant's french website! This really underlines the superiority of the experience through such vendors. 

However, here is the catch. Marketplaces are only useful when both Discovery and Convenience come together. What if I don't need the Discovery, but only the convenience? i.e. if I already know which restaurant I want to order from, should I really be paying a 10-25% fee to get it fetched through Deliveroo or UberEats? 

This happens to be the case with my family. My family has a list of favourite locations that they always want to eat from. So, I don't necessarily need the Discovery aspect of the service. As for convenience I can order online through the restaurant's own website and get basically the almost same service as UberEats or Deliveroo. I say "almost" because the user experience is not exact 1-1 swap - in some case the websites are not that polished; the payment network on some don't support all cards etc. However, the swap is good enough for me to consider this as a swap.

Example 1 - Shree Krishna Vada Pav

Website - £23.81 (plus credits worth £1.19)


Uber Eats - £32.85




That's a sweet 38% markup on the food itself (or a 27% discount when ordering direct). Remember that in both cases, it is a collection - i.e. delivery has been left aside.

Example 2 - Cafe Masala, Kew 

Cafe Masala has the same prices quoted on their website as well as on Deliveroo. However, they offer 20% discount on all direct orders, and they give delivery for free within close distance. Given that live within the distance, I get the food for 20% cheaper plus £2.99 or roughly 7-10% of order amount on delivery charges or about 27%.





Savings

These two cases underline how these services falter when Discovery is not in picture. Would you want to be paying 27%-38% higher when you can get the same service directly from the vendor?

Let's calculate what these savings amount to. 

In a typical week, my family orders delivery/take-away 2 times. Our average order size, when ordering direct is about £25 or about £32.50 if we ordered through one of these services. This means we pay £7.50 more ever time we use this service. If I take 80% of our ordering to be from restaurants we are familiar with, and who have near equivalent ordering experience, this means we can save on about 80 orders a year by using this option. This means a saving of about £600 a year

That's £600 a year you can put to better use in your life. Perhaps you want to buy some Deliveroo and Uber shares with those savings and enjoy the profits of others who can't seem to care to order directly with restaurants?

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