Delivery Fee for Restaurants (What Is It & How Much to Charge)

The online food delivery market is expected to generate revenues of $1.85 trillion by 2029, and the number of users in the meal delivery market is projected to reach 2.5 billion by the same year.

Delivery fees have become a contentious issue for restaurant owners, particularly with third-party delivery services like Uber Eats and Grubhub capturing a larger share of the market.

A third of consumers would opt to pay an extra fee for faster delivery; however, for restaurant owners, these additional fees can quickly add up.

In this article, I’ll explain what delivery fees are, explore the main delivery service options, discuss third-party delivery app alternatives, and share strategies for reducing your restaurant costs without sacrificing convenience.

What Is a Delivery Fee?

A delivery fee is a charge that is added to the total cost of an order when a third-party delivery service, such as Uber Eats, delivers the goods on your behalf.

This fee is intended to help the third-party cover the costs associated with delivering your order, such as fuel, vehicle maintenance, and driver compensation.

Fees are a natural way of covering operating costs. That said, many restaurant owners have noticed that, at one point, the commissions charged by food delivery apps to them have become slightly excessive.

More restaurant owners are questioning whether third-party apps are necessary, especially with delivery companies charging over 30% in commissions.

Below, I’ll share some key delivery fee facts every restaurant owner should know.

Delivery Fee vs. Service Fee

The delivery fee covers the cost of getting the food delivered to the customer, including the driver and transportation expenses.

The service fee, applied by platforms like Uber Eats or DoorDash, helps cover operational costs, such as payment processing and customer support. Service fees are often added on top of delivery fees, but serve different purposes—delivery fees cover logistics, while service fees cover platform operations.

In short, the delivery fee covers the logistics of getting food to the customer, while the service fee helps the platform manage its infrastructure and operations. Both fees may appear separately on a customer’s bill but serve distinct purposes.

3 Delivery Alternatives for Restaurants: What Delivery Options Do Restaurants Have?

Third-party delivery services, such as Uber Eats and Grubhub, are popular because they enable restaurants to sell food without having to build their own online systems or hire delivery drivers. However, they charge high commissions—often over 30%—which can be detrimental to restaurant profits in the long run.

Direct ordering with in-house delivery, utilizing the restaurant’s delivery drivers, entails managing the entire delivery process internally, encompassing ordering, employee training, and logistics for delivery. While this option gives full control, it requires more resources to implement.

A growing alternative combines the benefits of both: an in-house online ordering system with on-demand delivery. You manage the ordering system, while independent contractors handle delivery for a flat fee. This reduces commission costs and eliminates the need to hire delivery staff.

I’ll outline each option to help you find the best delivery model for your restaurant.

1. Direct Ordering with On-Demand Delivery

An in-house ordering system with on-demand delivery is when you have your own online ordering system integrated with a local delivery service that best suits your needs.

This means that just like the regular in-house ordering system, the restaurant manages the online ordering process.

The difference is that an on-demand delivery service handles the actual delivery of the food for a flat fee per order, and the restaurant doesn’t pay high commission fees to delivery platforms.

That way, you don’t have to worry about training and maintaining a team of delivery drivers.

You might be wondering, “Who receives the Delivery Fee in that case?” Restaurants pay the full flat fee to delivery companies and can either pass it on to customers or absorb it by modifying menu prices. In other words, customers either see the delivery fee listed separately on the receipt, or the prices of individual dishes already include the cost.

2. Direct Ordering with In-House Delivery (Own Delivery Drivers)

Restaurants that choose direct ordering with in-house delivery manage every aspect of the delivery process themselves. This includes accepting orders, dispatching deliveries, hiring and training drivers, and using restaurant delivery software to optimize routes and track orders.

With this model, restaurants are responsible for hiring drivers, purchasing delivery vehicles, and managing delivery dispatch, including route planning and scheduling. It’s a comprehensive solution that gives restaurants full control over their delivery operations.

Who receives the delivery fee in this delivery model? Restaurant owners or managers calculate the delivery fee and decide how it’s distributed. Generally, it goes to the restaurant. However, if drivers use their own vehicles and cover the fuel costs, part of the fee may be allocated to the driver.

3. Third-Party Marketplaces

Third-party delivery services, such as Uber Eats, Grubhub, and DoorDash, provide a platform for restaurants to receive orders. They handle delivery logistics, customer support, and restaurant payment processing in exchange for commission fees ranging from 15% to 30% of the order value.

Utilizing these services enables restaurants to expand their reach, eliminate upfront delivery costs, and provide customers with convenient delivery options. However, it means less control over the delivery process and potential challenges with maintaining brand identity.

In this delivery model, third-party marketplaces fully retain the delivery fee. Internally, they decide how to compensate their drivers.

To fully understand the commissions and fees associated with third-party food delivery apps and make an informed decision, check out these articles on Uber Eats commission, DoorDash fees, and Grubhub fees.

Why Is Food Delivery so Expensive? How Much to Charge Your Customers?

High delivery fees impact both customers and restaurateurs. High costs may deter customers from ordering, especially if competitors offer lower rates.

If a restaurant charges significantly higher fees than competitors, it’s likely to see fewer orders than if it were to offer cheaper or free delivery. This is why over 70% of customers prefer ordering directly from the restaurant rather than using third-party services like Uber Eats or Grubhub.

Food delivery costs have risen due to several factors, including higher labor costs for drivers, increased packaging expenses, and inflationary pressures on both food and delivery services.

Additionally, third-party platforms often charge high commissions, which further drive up the cost of delivery. These combined factors contribute to the overall expense of food delivery services.

Below, I’ve created a table showing restaurant delivery fees for 2025.

Sources: Grubhub Pricing, DoorDash Pricing, Uber Eats Pricing

The impact of delivery fees on customer behavior depends on the restaurant and market conditions. However, both customers and restaurant owners are increasingly burdened by third-party commissions.

Factors driving high delivery costs include labor, packaging, inflation, and other expenses related to delivery.

To save money, consider investing in your own restaurant mobile app. With a dedicated restaurant app builder, you can avoid high fees and gain more control over delivery without the high cost of custom development.

What Do Restaurant Delivery Fees Cover?

Delivery fees vary depending on whether you use direct ordering with on-demand delivery, direct ordering with in-house delivery (own delivery drivers), or third-party marketplaces. The specific expenses covered by these fees can vary based on the business and the delivery service used.

Below, I’ve outlined what delivery fees typically cover.

State-Specific Delivery Fee Regulations: What Restaurants Need to Know

Delivery fee regulations for restaurants vary by state and locality in the U.S. As delivery services grow, understanding these rules is essential for restaurant owners. Some states have retail delivery fees, while others apply taxes on delivery charges.

For example, on July 1, 2024, Minnesota enacted a new retail delivery fee that applies to many types of deliveries, but food and beverage deliveries from foodservice establishments, such as restaurants, were exempt from this fee.

On the other hand, states might apply sales tax to delivery charges, especially if the delivery is considered part of the sale (e.g., California and New York have specific rules around taxing delivery fees for food orders).

It’s crucial to stay updated on local regulations. I recommend consulting with a tax professional or legal advisor who is familiar with local foodservice laws to ensure that you’re following the correct procedures and not missing any exemptions or tax obligations.

How to Minimize Delivery Fees for Your Restaurant

Minimizing delivery fees is crucial for maintaining profitability. By taking control of your delivery process or negotiating better terms with third-party platforms, you can significantly reduce costs while improving your service.

Below, I describe some ways to reduce your delivery order fees.

Establishing your own online ordering system might seem like a challenge. There are, however, services dedicated to helping you do just that and for a flat fee, freeing you from outrageous long-term contracts and commissions.

In the long run, owning your delivery website and app will keep you in control of your business and help you save a lot of money you’d have to otherwise pay in commissions.

Customer Perception of Delivery Fees

Customer satisfaction is heavily influenced by how delivery fees are presented. Transparency and clear communication can go a long way in building trust and loyalty.

Research from Simon-Kucher & Partners shows that 70% of U.S. consumers are frustrated by hidden fees and complex pricing structures, which can lead to a negative perception of delivery services.

When customers know exactly what to expect, they are more likely to feel that the fees are fair, especially when they align with the actual costs incurred by the restaurant.