[ELI5] How do delivery services like Uber Eats make money when a rider get’s $5+ per delivery?
In: 34
In short – they dont in most of geographies and they loose money every year.
Market believes that autnomous driving will make this business profitable because you dont need drivers to share revenue with.
Cost money to make money.
1. The food prices are actually inflated. Last o checked it was about 10% higher than the original menu.
2. The company (Uber, GrubHub,etc.) Charges for shipping unless you have their premium status. Their premium status is often not utilized by people who have them cause it’s paid by their credit card benefit.
3. The salary to the driver is often subsidized by something else, like UberCar. Most business often goes at a lost to bring in customers, once customers are brought in they increase the price
I’m an UberEats driver. The fees actually come out of the price of my delivery. I don’t take low paying offers as indicated by OP. Tonight I delivered an order originally paying $12+. I ended up making $17 with an increased tip for 4 miles. The average order ranges between 6 to 9. I never take anything under 6.75 with a distance no more than 3 miles.
They don’t, they operate at a loss. Frankly I think they are a shitty investment, market share alone is worth nothing in a business with low to no barrier to entry. The investors will only get their money back if they jump the hypetrain before it derails. Might as well bet on NFTs and crypto. Uber makes 9 billion loss at 30 billion revenue and they are not building lasting assets for that money, it all goes towards market share. That market share will be gone the moment they try and get into green.
ubereats and other delivery apps makes money on the food item itself, there is a markup from how much that item is on the restaurants menu
Cost money to make money.
1. The food prices are actually inflated. Last o checked it was about 10% higher than the original menu.
2. The company (Uber, GrubHub,etc.) Charges for shipping unless you have their premium status. Their premium status is often not utilized by people who have them cause it’s paid by their credit card benefit.
3. The salary to the driver is often subsidized by something else, like UberCar. Most business often goes at a lost to bring in customers, once customers are brought in they increase the price
I’m an UberEats driver. The fees actually come out of the price of my delivery. I don’t take low paying offers as indicated by OP. Tonight I delivered an order originally paying $12+. I ended up making $17 with an increased tip for 4 miles. The average order ranges between 6 to 9. I never take anything under 6.75 with a distance no more than 3 miles.
They don’t, they operate at a loss. Frankly I think they are a shitty investment, market share alone is worth nothing in a business with low to no barrier to entry. The investors will only get their money back if they jump the hypetrain before it derails. Might as well bet on NFTs and crypto. Uber makes 9 billion loss at 30 billion revenue and they are not building lasting assets for that money, it all goes towards market share. That market share will be gone the moment they try and get into green.
Uber Eats base pay is 2.00. DoorDash base pay is 2.25.
Source: I used to do Uber Eats and currently do DoorDash
Uber Eats base pay is 2.00. DoorDash base pay is 2.25.
Source: I used to do Uber Eats and currently do DoorDash
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