The Hidden Cost of Online Ordering

Unveiling the Menu Markups on Food Ordering Apps
January 22, 2024

Over the last ten years, the food ordering landscape has witnessed a giant shift, with industry giants dominating the market. Unfortunately, this shift has led to the prioritization of profits over providing genuine value to users and supporting local restaurants. They’ve created an unsustainable environment by charging restaurants fees 2-4x higher than their margins*. What many users don’t realize is they are covering the difference as restaurants offload these costs onto consumers in the form of menu markups.

Consider this scenario: you find your favourite local restaurant on a food ordering app, excitedly scroll through the menu, and place an order. Little do you know, the prices you're paying are inflated compared to what you would pay at the restaurant itself.

The Anatomy of Menu Markups: Understanding the Numbers

Menu markups are not a unique phenomenon. The New York Times found that menu markups on popular delivery apps are up to 91% more expensive than what you would pay in-store+, resulting in a huge impact on the cost of your order. There are multiple reasons why menu markups have become so common. Restaurants often cite the need to cover additional expenses such as packaging and logistics, however, the main driver of these markups is the unsustainable commission charged by delivery apps.

To put this into perspective, if you regularly order $50 worth of food, you could be unknowingly spending an additional $45.50 on menu markups and additional fees. These costs add up quickly, secretly impacting your monthly food budget.

MenuIQ: Empowering Consumers with Knowledge

Amidst rising concerns over menu markups, we aim to put power back into users’ hands with our groundbreaking new feature – MenuIQ. This feature aims to empower users with knowledge about the true cost of their food orders by allowing them to easily compare prices across delivery apps and the restaurant's online menu.

Ritual collects information from various platforms and presents users with a side-by-side comparison of prices, highlighting any markups. By using MenuIQ, users can save money and make smarter choices when it comes to ordering food online.

In the world of online food ordering, convenience often comes at a price – a price that until now has been well hidden from the user. The menu markups on food ordering apps can quietly inflate your overall spending on meals, impacting your budget more than you realize. Ritual's MenuIQ feature emerges as a beacon of transparency, giving users the tools they need to make informed decisions and save money. By using MenuIQ, you can compare prices, uncover hidden markups, and make choices that align with your budget.

*Margin information was taken from the DoorDash website and compared to their commissions page.

+Information paraphrased from “Up to 91% More Expensive: How Delivery Apps Eat Up Your Budget” by The New York Times