Some restaurants hike prices by up to 25% for using delivery apps
Ordering in from restaurants in your area is all the rage, but do you know how much extra it’s costing you to eat those meals on your couch or at your desk?
Cape Town-based Simon Colman assumed the R10 delivery fee disclosed on the UberEats app in the payment section was the only extra cost - until he happened to compare what he’d paid for a meal via UberEats with the same restaurant’s menu prices.
He revealed his findings in a blog, titled "Stand and deliver - The true cost of fast food delivery service".
Colman's investigation found that “the cost of the very same meal was around 25% higher on the UberEats app.”
This prompted him to investigate the price differences at four other local restaurants - Col'Cacchio, Simply Asia, Nandos and Steers - using the UberEats app.
He found that Nando’s and Steers charge the same on the delivery apps as they do in their restaurants, but Col'Cacchio and Simply Asia padded their menu prices by 23% and 20% respectively.
Clearly some restaurants choose to pass on what they pay to be hosted on those delivery apps, while others don’t.
But how do consumers know? In most cases, they don’t - unless they do their own research, like Colman.
Both UberEats and rival service Mr D Food warn consumers of possible mark-ups only under their FAQ sections, rather than displaying this information more prominently in the order section of each listed restaurant.
Mr D Food states: “All restaurants set their own prices on the Mr D Food app. Whilst we encourage our restaurant partners to keep their prices on the app the same as their in-house menu, some restaurants still insist on increasing their prices for delivery.
“We'll keep doing our best to convince them to maintain a level playing field.”
UberEats simply states: “Note that prices and offers on the UberEats website and in the UberEats app may differ from prices and offers in the restaurant.”
Another food app, OrderIn, clearly indicates “in-store pricing” next to each restaurant listed on its app, allowing consumers to see at a glance which restaurants have raised their prices for the delivery service and which have not.
For example, the app lists 37 restaurants for residents of La Lucia in KwaZulu-Natal, of which 16 (meaning 43%) have inflated their regular restaurant prices.
There is not such disclosure on the UberEats app.
“There is no consistency as to how the hidden charges are levied, so the consumer never knows which prices have been inflated to cover the platform costs,” said Colman.
“Is the service provided by UberEats or Mr D worth the extra cost? In my opinion it probably is, but then why not simply advise the consumer during the ordering process that the prices for specific restaurants have been inflated?”
Responding, @PennyMarais tweeted that this was "why I stopped ordering in RocoMamas - waffles and shakes prices just went too high”.
In a poll conducted by Colman, 57% of respondents said if a 20%-30% surcharge on app menu prices was disclosed, they would not use the app.
Colman quotes the Consumer Protection Act (CPA), which would appear to compel intermediaries, such as delivery apps, to disclose all fees: “An intermediary must ... disclose any information ... which may be relevant to the consumer when deciding whether to acquire the service rendered by the intermediary ... commission, consideration fees, charges or brokerages payable to the intermediary by any other person.”
Uber Africa spokesperson Samantha Fuller said UberEats did not “request or require" restaurants to disclose the rationale behind their pricing strategies.
“This would constitute each restaurant's proprietary, business-sensitive information,” she said. “We respect that this information may be competitively sensitive.”
However, UberEats does require that the pricing that each restaurant loads onto the app, which is ultimately visible to the customer, is accurate.
“The eater is given a further opportunity to confirm the cost per item, as well as the total cost of the meal ordered, in the 'your basket' summary page prior to placing an order. We believe that this is in line with the requirements of Section 23 of the CPA, which requires that clear and accurate pricing be disclosed to consumers prior to their purchasing goods or services," said Fuller.
“Our T&Cs and FAQs is where we house all information and education about our app. Anyone can access these at anytime. We also have a 24/7 support team, who are there to answer questions any eater may have.”
TimesLIVE put it to her that in the interests of full disclosure, the app should disclose the fact that a restaurant’s usual prices have been inflated, not just in the FAQ section but in the same place as the delivery fee is displayed, as an addition to the items ordered.
“Providing our users with access to quick, reliable and affordable food delivery is a top priority for UberEats,” said Fuller.
“Before someone places an order on the UberEats app, they are provided with a clear and transparent breakdown of all costs. This includes an itemised list of their food order, with the delivery fee highlighted separately.”