What's the difference between Uber Eats, GrubHub and DoorDash

News Hound

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Jan 7, 2019
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There are so many new services popping up all the time it's getting really hard to keep up with them! So, I thought I'd post a quick thing tonight on the differences between Uber Eats, GrubHub and DoorDash

Basically all three services are food delivery services. And they're really pretty similar all things considered.

The way they work is you use an app to order a meal and one of the independent contractor delivery drivers picks it up from the restaurant and delivers it to you.

Grubhub
Grubhub delivers only from restaurants that it has signed up to work with. You can't order from restaurants outside of their network. They claim to have 50,000 restaurants in 1,100 cities which averages out to only about 45 per city. Obviously they have more in bigger cities and only a handful in small towns.

To order from Grubhub, you would:
  1. Select "Delivery" or "Pickup", depending on how you want to get your food.
  2. Enter your complete address into the "Street address" field and click “Find food.”
  3. You’ll see a list of restaurants you can order from. Select a restaurant to view its menu, and select menu items to add to your bag. When you’re ready to check out, click “Proceed to checkout.”
  4. Double check that your address and order are correct. Enter any special instructions for your order.
  5. Choose your desired payment method and click “Place Your Order.”
  6. You’ll receive an email confirming your order, and we’ll notify the restaurant to begin prepping your food. Easy!
Since Grubhub only works with restaurants it has partnered with it is also able to offer you free pickup service and still make money off of the 15% commission they take from all orders that go through them. Although the pickup service really seems to go against the reason for Grubhub existing.

Grubhub says they don't require any minimum expenditure, but sometimes the restaurants do. But they also say if you order for pick-up (meaning you're going to go and pick it up), then there is never a minimum.

DoorDash
DoorDash says they are in 1,500 cities and connected to 200,000 restaurants. This comes to an average of 133 per city - which seems higher than Grubhub, but who knows if they both calculate these figures in the same way. Like Grubhub they only work with restaurants they partner with. In my area they do have a lot more nearby than Grubhub does. And they even have some that are delivering at 1:30 in the morning. Grubhub says all their restaurants are closed right now.

Right now, they charge a $1 delivery fee (in my area). If they take a 15% commission like Grubhub out of each order, which seems likely, then it's really hard to see how either one of these companies isn't losing money on almost every order.

Uber Eats
Uber Eats works much the same way as the other two in that they work only with restaurants that they've partnered with. They also take a commission out of every order. And as with the other two, on Uber Eats you place your order through the app. You don't place your order directly with the restaurants.

Uber claims that Eats has been growing wildly. They've released numbers that show it making up a growing and substantial portion of its bottom line. Although analysts I've read say they are losing money on every Eats order just like they do on every Uber rides order. So it's not clear the growth in Eats is really going to help their bottom line all that much.

The problem for all these companies is it's really hard to charge consumers enough for the delivery so that they can pay the drivers what they need to earn to keep doing the work. That means the companies end up subsidizing the deliveries by paying drivers out of their own pockets (which are lined with venture capital funds). Because of that they do end up losing money on most of their orders.

Think about it like this... a customer calls in with a $25 pizza order. If the companies take 15% of that they get $3.75. I'm sure their intention is to keep all of that as their pay. But they also have to pay the driver. The very minimum I can imagine drivers doing this work for would be around $5 per order. They wouldn't make any real money at that rate but I know there are a lot of guys who will do it for around that amount. That way they could make $7-$10 an hour with the potential for tips for a few extra dollars.

But if all their guys are only making $7-$10 an hour they will find it hard to recruit enough drivers. And even at $7 an hour - that's more than likely more than the companies are earning each hour per driver. So to pay drivers more, even if only a dollar or two an hour more is just going to make their losses greater.

If anybody thinks they're making money, we'd love to hear your reasons why.