Essential Crisis of Food Delivery Services: A Boom without Profit

The demand for food delivery skyrocketed during the pandemic. With restaurants closed and the ability to bring at least some culinary variety home, apps like GrubHub and DoorDash experienced enormous user growth. The industry's revenue increased from $90 billion in 2018 to $294 billion in 2021. However, profitability remains elusive. According to a 2024 Financial Times report, leading online delivery services in Europe and the USA have accumulated cumulative operating losses of over $20 billion since their IPOs. Investors are increasingly reluctant to inject more capital, especially in light of rising customer dissatisfaction and controversies over the working conditions of couriers in the gig economy. The history of food delivery spans several centuries. For instance, Queen Margherita of Naples ordered the first known delivery pizza in 1898. Modern technology, such as telephony and the internet, has revolutionized this service in recent decades. Apps like DoorDash, GrubHub, and Uber Eats soon dominated the market. They promised convenience while imposing hefty fees on restaurants and often relegating courier deliveries to underpaid contractors. Recently, local restaurant owners have voiced their concerns. Philip Foss, a Michelin-star chef, describes the apps as tempting but economically damaging: "The apps are destroying restaurants, from small family businesses to high-end kitchens." The income disparity between the platforms and their couriers is immense. A typical Uber Eats courier earns between $2 and $4 per delivery but benefits little from rising operational costs and low tips. The increasing prices and additional fees for food orders via apps have caused consumer discontent. According to Consumer Reports, customers complain about longer delivery times, cold food, and unclear fee structures. A 2023 New York Magazine article declared food delivery services a "complete rip-off," as the fees often exceed the cost of the actual food. Many customers are forced to rethink their habits as the orders take a significant chunk out of their budgets. Although the food delivery boom continued during the pandemic, the future of profitability remains uncertain. Chef Philip Foss emphasizes that there is no easy solution, but some steps could help create a fairer delivery ecosystem. Companies like ChowNow and Slice position themselves as ethical alternatives by offering fair wages and moderate fees. Foss, however, recommends simply calling the favorite restaurant directly to support local dining and establish a more intimate connection. In conclusion, Foss urges the public to consciously support restaurants that forgo app services and thereby contribute to a fairer food industry.