We're not surprised to see Uber Eats aligning with its competitors on the new fee structure, especially to drive more revenue on smaller orders.
— Erika Adams
Uber Eats is shifting its delivery fee structure yet again. This time, the company announced that it would be lowering the base delivery fee on orders and adding on an additional service fee and small order fee. The changes are effective as of March 18.
The new delivery fee varies but it’s typically lower that the sliding scale of $2.49 to $6.49 that it was before, and the $5 flat delivery rate prior to that. In New York City, a homewrecker burrito from Moe’s Southwest Grill delivered via Uber Eats now costs $9.89, plus tax ($0.88), a delivery fee of $1.49, a service fee of $1.48, and a small order fee of $2.00, for a grand total of $15.74 before tip.
The service fee is calculated at 15 percent of a customer’s order, and the small order fee is implemented on orders that are $10 or less.
“These fees work together to help cover delivery costs and keep couriers on the road so your food can arrive quickly and reliably,” Uber Eats stated via an announcement detailing the new fee structure.
Competitors like Caviar and Postmates have similar fee structures. Caviar charges service fees up to 18 percent per order, plus a delivery fee. Restaurants on the platform are also allowed to set minimum order amounts. If customers place small orders that don’t reach the minimum, they have to pay the difference in order to complete the purchase. At Postmates, users are charged delivery fees, service fees, and small order fees as well.
Uber Eats has been hailed as the most promising new growth business for parent company Uber. It has certainly hit the ground running in 2019: Uber Eats announced in January that it was expanding a highly-touted partnership with coffee chain Starbucks, and similar giant chain partner McDonald’s has been aggressively expanding its own partnerships with the service in recent months (though both partnerships have hit obstacles in ground-level operations). Uber is expected to start the process for an initial public offering next month.