Takeout and Food Delivery Fees: What to Know About Online Ordering Commissions and Fees
Let’s make sense of food ordering fees for your restaurant — both for you, as a restaurant owner, and for your guests.
Last updated on July 19, 2023.
Online ordering can be a valuable addition to a restaurant's business model.
Many restaurants have rapidly adjusted to an online ordering system and delivery services to match the demands of the pandemic. However, there’s no end in sight when it comes to takeout and delivery demand from guests.
What does this mean for your restaurant? Well, while offering delivery and pickup order options was once a special perk to provide your guests, off-premise is now an essential part of generating revenue and growing your business.
While restaurant owners typically understand the value in offering off-premise options for guests via online ordering, there is one thing that can mystify them and hold less-eager restaurateurs back from taking the leap: confusing fees.
Today, we’re going to dive into the world of food delivery fees, from online ordering fees to delivery order commissions and more.
In this article, we’ll cover:
- The definition of each type of delivery or commission fee and what makes them different
- What common delivery services charge restaurants as of the date of this article
- How the next generation of digital ordering from Toast can help restaurant owners do more
Common food delivery and pickup order fees
Commissions, fees, and other costs — oh my! It can be intimidating to make sense of the takeout order and food delivery fees incurred via third-party apps or first-party online ordering platforms.
Let’s cover some of the most common costs associated with online ordering and delivery, based on whether they are incurred by the restaurant or the guest.
Fees for the restaurant
Restaurant-facing commission fees
A commission is a form of variable pay for services or goods. Here, the term variable pay means that it’s in addition to the base compensation/charge and the amount varies. Typically, commissions are calculated as a percentage of the total charge.
To put it simply, commissions in the restaurant industry, in regard to online ordering, often occur as a per-transaction fee that is calculated as a percentage of the order’s subtotal. For example, restaurant owners who list their restaurants on a third-party marketplace might pay a commission rate for each order processed through the platform.
Many third-party food delivery platforms — which are platforms that are separate from your restaurant's point of sale and provide delivery services on your behalf — charge restaurant owners a commission rate for orders placed on their sites or apps. We’ve included some common commission fee rates for delivery apps below. However, some first-party ordering platforms — such as Toast TakeOut and Online Ordering — offer online ordering tools for restaurants that are commission-free, meaning they do not charge restaurants a per transaction fee calculated as a percentage of the order’s subtotal.
With commission-free ordering tools, like Toast, the restaurant pays to use the online ordering tools but does not get charged a commission on the money generated by each individual order.
Commission fee rates for common delivery apps
Below are some of the most common food delivery apps and what they state on their websites that they charge for percentage-based restaurant-facing commission fees, as of May 2023.
- DoorDash: 15-30%, depending on whether a restaurant is on the Basic, Plus, or Premier plan. DoorDash offers its plans with zero payment processing fees. (DoorDash also offers a commission-free plan called Storefront)
- Grubhub: 5-15+%, depending on whether a restaurant is on the Basic, Plus, or Premium plan. (Grubhub also offers a commission-free plan called Grubhub Direct)
- Uber Eats: 15-30% for delivery orders, depending on whether a restaurant is on the Lite, Plus, or Premium plan, and a 6% fee for pickup orders, regardless of the plan.
Note: This information was taken from these companies’ websites, and was last updated on June 1, 2023, and, as a result, may not accurately reflect changes or updates that have been implemented since then by the featured third-party providers. This information may not account for additional products or services offered by these companies that are included with these fees.
Interested in learning more about the true cost of your online ordering platform? Check out this article.
Restaurant-facing flat fees
Flat fees are charges that do not fluctuate based on other variables. For example, restaurant owners may pay a flat fee to use a first-party online ordering platform. For third-party platforms, such as DoorDash’s white-labeled solution called DoorDash Drive, restaurants are charged a flat fee to use DoorDash’s delivery drivers. Depending on the provider, restaurants who are charged a flat fee for delivery services can sometimes choose to pass the fee onto their guests, or cover all of it themselves but adjust menu prices for delivery to cover the cost.
Fees for the guest
Guest-facing flat fees
Many online ordering platforms, both third-party and first-party, charge guests a flat fee, which may be referred to as service charges, order processing fees, or a “small order fee.” These service fees are often charged regardless of whether the guest is ordering for takeout or delivery. They may also vary for delivery orders based on the distance between the restaurant and the delivery address. This fee may or may not go to the delivery driver, the restaurant, or the technology platform, depending on the tool the restaurant uses for online ordering.
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This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.
DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.