I can’t tell if this post is referring to ordering online and picking up yourself (suggested by ” If you would cost your local place $5 to save the cost of a fifteen second phone call...”) or delivery (suggested by the 20% fee and the companies listed). If it is talking about delivery, it’s incomplete without addressing the relative cost of delivery vs dining in.
This is a little messy because rent is an extremely fixed cost and labor is only adjustable on long time horizons, but back of the envelope:
According to the first article I found on Google, table service restaurants spend 30-40% of income on labor, and fast food can get as low as 25%. The service of fast food is about equivalent to what it takes to serve takeout or hand to a delivery service, so let’s assume the labor costs of dining in are 5-15% (which is lower than I would have guessed).
There’s also the physical building. This quora post (which places labor costs at 20-40%) says rent makes up 10-50% of cost. Of course some of that is covering the kitchen, which serves delivery orders as well. Call it 1⁄3.
If delivery services handle the credit card fees, that’s another 2-3% they’re saving the restaurant (grubhub passes on the credit card fee, but charges only 15%).
Then there are smaller costs they’re saving- some utilities, diningware, reduced liability costs from the lack of physical proximity.
So take away/third party delivery costs the restaurant somewhere between 14 and 50 percent less than dining in. Given this, losing 20% to a delivery service doesn’t seem inherently unjust, depending on the restaurant’s cost structure. The real injustice is charging takeout customers dine-in prices.
I can’t tell if this post is referring to ordering online and picking up yourself (suggested by ” If you would cost your local place $5 to save the cost of a fifteen second phone call...”) or delivery (suggested by the 20% fee and the companies listed). If it is talking about delivery, it’s incomplete without addressing the relative cost of delivery vs dining in.
This is a little messy because rent is an extremely fixed cost and labor is only adjustable on long time horizons, but back of the envelope:
According to the first article I found on Google, table service restaurants spend 30-40% of income on labor, and fast food can get as low as 25%. The service of fast food is about equivalent to what it takes to serve takeout or hand to a delivery service, so let’s assume the labor costs of dining in are 5-15% (which is lower than I would have guessed).
There’s also the physical building. This quora post (which places labor costs at 20-40%) says rent makes up 10-50% of cost. Of course some of that is covering the kitchen, which serves delivery orders as well. Call it 1⁄3.
If delivery services handle the credit card fees, that’s another 2-3% they’re saving the restaurant (grubhub passes on the credit card fee, but charges only 15%).
Then there are smaller costs they’re saving- some utilities, diningware, reduced liability costs from the lack of physical proximity.
So take away/third party delivery costs the restaurant somewhere between 14 and 50 percent less than dining in. Given this, losing 20% to a delivery service doesn’t seem inherently unjust, depending on the restaurant’s cost structure. The real injustice is charging takeout customers dine-in prices.