When scrolling through the menu items on food delivery apps like Grubhub, Uber Eats, and Doordash, it's clear to see that the prices are inflated. But it's only a few bucks, so what's the big deal? The elevated menu prices are only the beginning. By the time all the fees are added to your order, you can pay almost twice as much as it costs at the restaurant.

Pizza's Here!

It all began back in the 80s with Domino's pizza. You could order any pizza and have it delivered to your door for about the same or even less than it costs to go out. Pizza Hut scrambled to launch their own delivery service, then Papa John's joined the party. Cheap pizza was here to stay. Today not much has changed, except you can skip the horror of dealing with an actual person by ordering online.

Check Please

There are a number of entities involved when an order is placed on a food delivery app. There's the restaurant, the company that provides the app, and the driver. Delivery apps charge restaurants commissions which is the source of the inflated menu prices. The apps themselves charge a variety of fees which can include a delivery fee, service charge, surge fee, regulatory response fee, small order fee, and taxes. Then there's the tip.

Convenience

Food delivery apps are convenient, but that convenience comes at a hefty premium. Unlike ordering a pizza directly from a pizza joint, food delivery apps cost significantly more than dining out. Total food costs – groceries plus dining out – should never exceed 15% of your take-home pay. When costs rise above that, it comes at the expense of other important financial obligations such as saving for retirement and financial emergencies/unplanned expenses.

Could the dollars spent on food delivery be put to better use? How about going to the grocery store and preparing your own meals? You can prepare healthy meals at home for a fraction of the cost – as little as a buck or two per person. Dining out is already more expensive than eating at home. When the bill is compounded by food delivery fees, you can blow an entire week's worth of groceries on just one meal.

Closing Thoughts

Are food delivery apps draining your wallet? If so, perhaps you need to evaluate your spending habits. We all like to splurge now and then, but too much will put you on the bullet train to the poorhouse.

Photo credit: Pixabay Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.