An Auckland restaurant has warned about hidden fees associated with delivery apps, after it was stung with service costs.
A restaurant in the Auckland suburb of Glen Eden has claimed that hidden fees associated with Uber Eats deliveries left it with only a quarter of the revenue from more than NZD 300 worth of orders.
Vietnamese eatery Lixiri’s Kitchen has operated through Uber Eats for a substantial period of time, as well as with other food delivery platforms like DoorDash and Order Meals.
The restaurant took to social media to voice its concerns about the matter. Posting a screenshot of the costs of corporate food delivery services, it claimed that from the NZD 300 worth of orders, it only received NZD 85.36. In comparison, it was paid 28 percent of the orders’ total value.
A cause of this has been attributed to the fact that Uber Eats does not reduce its fee when processing two-for-one deals or “buy one, get one free” offers. This meant the restaurant was charged a service fee based on the total price or the order, despite the reduced profit.
Uber Eats, and other platforms of this kind, has costs in place that users agree to. Service fees for Uber Eats can be as low as six percent for pick-up and as high as 30 percent for delivery. These options give restaurants across the country the flexibility and control to tailor their operations to what works best for their business.
However, the app’s service fees do not include GST, advertising or promotions, which come at a great expense for small businesses. To offset the fees, establishments often charge slightly more for on ordering platforms than in-store prices.
In its 2024 Economic Impact Report, Uber Eats outlined that restaurants benefit from the exposure online. Seventy percent of the app’s customers found new restaurants on the app, with a further 58 percent going on to dine in person.
For cases similar to this, small businesses should remain constantly vigilant about hidden fees that may occur and make their own decision before joining apps.
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