You won't believe the mark-up restaurants charge through delivery apps

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** This story has been updated CAPE TOWN – The convenience of food delivery apps cannot be down-played for people living in the city, millennials and those of us who are just lazy and can't be bothered to learn how to cook. But is the convenience of Uber Eats and Mr D Food costing us a fortune? According, to Business Insider SA, getting your meal through Mr D and Uber Eats can be quite expensive. You could be paying up to 32% more for your meal if you use these apps and don't go into the store.

It should be noted that this exorbitant percentage excludes the R10 delivery charge that these apps add on to the bill.

The research looked at a number of fast food merchants and compared their in-store prices with the prices listed on Uber Eats and Mr D in Johannesburg and Cape Town.

The results showed that all of the fast food outlets charged more for their food items on these delivery apps when compared to their in-store prices.

The only exception was Wimpy.

So let's break this down.

According to the research, in Cape Town pizzeria Col'Cacchio charges a premium of up to R18 (24%) through the Uber Eats and Mr D app. This was the largest price difference in Cape Town.

The Spur family restaurant is also making a heavy profit. A simple Spur burger costs you just under 10% more if you purchase it using one of the delivery apps in.

If you are in Johannesburg and you are jonesing for a Spur Burger Combo, you could be paying up to 32% more than just going into the store.

A BRIEF BREAKDOWN:

In Cape Town, you could order a simple Margarita from Col'Cacchio through Mr D and Uber Eats, and pay R93 for the pizza from both apps. The in-store price is actually R75, that is an R18 mark-up. This price excludes the R10 delivery cost. So in total, you will pay R103.

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If you wanted to purchase Simply Asia's sweet and sour stir fry through the delivery apps you will be charged R95.30 (plus the R10 delivery charge). If you went into the store you would only pay R79. This is a R16.30 mark-up.

If you live in Johannesburg and wanted to buy a burger from RocoMamas you will pay R85 (minus the delivery charge), but in-store, the price is R74.

So you would pay additional R11.

RESPONSE

Uber Eats and Mr D told Business Insider SA that they have been quite transparent and stated that the actual restaurants decide and set their own prices on the delivery app platforms.

Rae-Lynn Fletcher from Mr D told the news site that they encouraged restaurants to charge the same in-store prices on the app platforms.

“We'll keep doing our best to convince them to maintain a level playing field.”

Samantha Fuller, the spokesperson for Uber Sub-Saharan Africa, also said that Uber Eats always provides a clear breakdown of what a person will pay when they order on the app.

She went on to add that Uber has no control over the pricing of food items and that these prices are set by the restaurants themselves.

Personal Finance reached out to both Uber Eats and Mr D for comment on the mark-up charged through delivery apps.

Devin Sinclair, the head of Mr D Food, in his response, reiterated that "all restaurants set their own prices on the Mr D Food app".

Sinclair also said that "while we encourage our restaurants to keep their prices on the app the same as their in-house menu, some restaurants still insist on increasing their prices for delivery. We'll keep doing our best to convince them to maintain a level playing field."

Mr D charges customers a standard service fee of R15 per order, including VAT.

This was echoed by Uber Eats, which said it in its response that it "does not request or require restaurants to disclose the rationale behind their pricing strategies (including any inputs into their ultimate pricing) as this would constitute each restaurant's proprietary, business-sensitive information; we respect that this information may be competitively sensitive".

"Uber Eats does however, require that the pricing that each restaurant loads onto the app, and that is ultimately visible to the end-customer - the eater ordering food via the app, is accurate.

"The eater is given a further opportunity to confirm the cost per item as well as the total cost of the meal ordered in the 'your basket' summary page prior to placing an order."

— Personal Finance (@persfinza) January 15, 2019

PERSONAL FINANCE