Why Food Delivery Is So Expensive

By: Keith Wagstaff · June 26, 2024 · Reading Time: 2 minutes

Getting meals delivered via apps like Uber (UBER), DoorDash (DASH), and others could take a big bite out of your budget.

Recently consumers have noticed their bills climb to new heights. Inflation has driven up food prices, meaning consumers are paying more at restaurants, in grocery stores, and, yes, while ordering meals from the couch. But there are other reasons that food delivery has become more expensive.

Salad Days Are Over

In New York City and other busy cities, delivering food — often on a bike or scooter — can be dangerous work . That’s part of the reason New York passed a new law requiring companies to pay delivery workers $19.56 an hour before tips, up from an average of $5.39, and why Seattle created a delivery minimum wage of $26.40.

The goal is to help delivery workers — who are technically “independent contractors” and sometimes face low pay, inconsistent work, and no employee healthcare — make a living in some of the most expensive cities in the country.

In some cases, companies have passed these increased costs onto consumers. In Seattle, Uber Eats instituted a $4.99 delivery fee, which pushed some people to stop using the app . While blame is being hurled at CEOs and politicians over higher prices, the truth is that cheap food delivery may never have been sustainable.

Over at The Atlantic, Derek Thompson has argued that food delivery, car rides, and other services were made affordable by a “millennial lifestyle subsidy .” Essentially, start-ups and some tech companies are changing the way they’re doing business, pivoting from trying to attract customers with low prices to charging more to make their businesses more sustainable. Now, the argument goes, with interest rates high and the easy investor money gone, Uber, DoorDash, GrubHub, and other companies have been forced to raise prices to turn a profit.

How to Eat for Less

For many consumers, putting food on the table has become a financial strain. But there are steps you can take to reduce your food costs, including creating a grocery budget and embracing cheaper store brands. Cooking is cheaper than getting food delivered. For those too busy to cook at home, signing up for a loyalty program, such as Uber One or DashPass, which offer discounts in exchange for a monthly fee, could help reduce their costs.

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