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Uber Eats Merchant Fee And Strategy

Uber Eats Merchants can pay 50% less merchant fees and commission, provide a tailored delivery experience for customers and increase online orders using these steps.


Uber Eats offer merchant partners 4 main types of services that you can utilise for your restaurant:


1) Marketplace at 30% commission fee (excl. GST)

2) Self-delivery at 16% commission fee (excl. GST)

3) Web Shop at 6% ~ 25% commission fee (excl. GST)

4) Uber Direct (white-label flat fee delivery drivers starting from $10 excl. GST)


Source of information was sourced directly from Uber Eats website.


uber eats merchant hands uber eats paper bag to customer

UBER EATS MARKETPLACE 🛒🍕🍔🍣🍜

Uber Eats marketplace for restaurant merchants is their most popular product. In Australia, Uber Eats charge merchants a 33% commission fee (incl. GST) on the value of an order. So for instance if someone orders $110 (incl. GST) of food on the Uber Eats mobile app, Uber Eats takes a cut of the purchase amount from the merchant’s earnings. In this example, Uber Eats receives 33% x $110 = $36.30 and the merchant receives $73.70 (incl GST).


Separately, Uber Eats also charges the customer (not merchant) two additional fees, namely Service Fees (which is usually between 10% ~ 15% of the order value) and a Delivery fee (which is usually displayed as an amount between $3.00 ~ $6.00). Both the service fee and delivery fee go directly to Uber Eats (not the merchant).


If you’re using Uber Eats Marketplace and relying on Uber Eats delivery drivers to pick up and deliver your food, you won’t have much control over the delivery process, delivery times and delivery fees.

uber eats merchant handling bags on counter


PROS OF UBER EATS MARKETPLACE

1 Hungry Audience

In Australia, Uber Eats has the largest market share of online food delivery sales with millions of hungry users on the app. As a merchant, once you’ve listed your restaurant on Uber Eats marketplace, you can expect hundreds and possibly thousands of eyes going through your restaurant name and tempting photos of your dishes almost immediately.


In other words, it’s much easier to get sales on Uber Eats than say, using Google Ads or Facebook Ads to advertise. This is because, when you advertise on social media, Google Ads or Facebook Ads, the biggest challenge is always finding the right audience (i.e. hungry people ready to order with a tap on their phone).


Furthermore, the users on Uber Eats mobile app already have their credit card details stored in the app. This makes purchasing food on the app effortlessly easy which is vital for increasing online sales.


2 Delivery Network

Another key advantage of using Uber Eats marketplace is their wide network of on-demand delivery drivers. If you don’t have your own delivery staff and you are not too fussy about how the food is delivered and accuracy of pick up time, then this service would be perfect for your restaurant.



CONS OF UBER EATS MARKETPLACE

1 Competition

Whilst Uber Eats has the largest food delivery market share in Australia, it also has the largest number of restaurant merchants using it. Over the last few years, restaurant merchants have become very adept at using Uber Eats marketplace.


If you are wondering why your sales are low on Uber Eats, that you need to understand the key strategies that successful Uber Eats merchants are using to grow their sales on Uber Eats marketplace. One of the most effective strategies to increase sales by up to 30% is to use professionally taken food photos for your menu on Uber Eats.


2 Expensive fees

Many restaurant owners complain that Uber Eats take out a large chunk of their earnings. We agree that 33% (incl. gst) is not a small amount for small business owners like restaurant merchants. However, there are always options around this. Read on further to find out more.


3 No control over delivery standards

Another common complaint from Uber Eats merchants is the poor standard of delivery carried out by some of the delivery riders and drivers on the Uber Eats network. As Uber Eats delivery drivers are generally paid a small amount of fee per delivery (usually between $5.00 ~ $8.00), the delivery drivers often either reject or cancel pick up requests, especially during peak delivery hours and days (e.g. Friday and Saturday evenings). Sometimes, they also arrive late for pickups and drop offs as they find ways to earn more by doing multiple deliveries across various food platforms.


4 Refund disputes

Last but not the least, we also often hear from Uber Eats merchants that refund disputes are often processed in favour of customers. Sometimes, merchants are forced to refund the value of the entire order even though there is issue with only a single item. For certain restaurants, this could be as high as 10% of monthly sales.



UBER EATS SELF-DELIVERY

Uber Eats self-delivery option lets restaurant merchants list their restaurants on Uber Eats marketplace without using Uber Eats delivery network. This commission charges for this option is 17.6% (incl. GST) approximately half of the usual marketplace commission.

uber eats merchant speaking to restaurant staff


Self-delivery is our recommended approach to using Uber Eats as it gives the restaurant full control over its own delivery process and at the same time, benefit from the high volume of sales that come from Uber Eats marketplace.


With this approach, you can:

  1. Set a delivery radius for delivering using your own delivery drivers

  2. If an order is beyond a certain distance, you can set it so that the order is automatically picked up by an Uber Eats driver (in that way, you own delivery staff only needs to focus on orders that are close by).

  3. If all your delivery staff are busy, you can easily change the setting, in real time, so that Uber Eats drivers will deliver all your orders until your own delivery staff are available again.

  4. Set your own delivery fee on Uber Eats. This means that the delivery fee that customers pay, goes directly to the Uber Eats merchant (i.e. you), not Uber Eats.


PROS OF UBER EATS SELF-DELIVERY

1 Delivery Control

By using your own delivery drivers, you have full control over pick up times to match your food preparation times. You can use your own restaurant branded thermal bags and your delivery drivers have more accountability over their delivery standards as they don’t just pick up, drop off and leave. You would expect them to return to the restaurant after each drop off for the next delivery.


Furthermore, using food delivery services like DeliveryTasker, Uber Eats merchants can easily and very quickly (within 1 hour) hire private independent food delivery contractors to work just for their restaurants for 2 ~ 4 hours, any time and day of the week, on-demand, without paying any platform fees.


Food delivery drivers from DeliveryTasker also offer Uber Eats merchants extra services like folding takeaway boxes, polishing and drying cutleries and more. What’s even better is, DeliveryTasker has a completely free tier that allows Uber Eats merchants to get up to 4 food delivery drivers on-demand, EVERY month, without paying any subscription or platform fees. It’s great for filling urgent shifts when your own delivery staff can’t turn up for work last minute, or perhaps when you need that extra hand on a busy day.


You can even use the drivers from DeliveryTasker to run orders from other platforms, your phone orders or your own online ordering website.





2 Lower Uber Eats merchant fee

Using the self-delivery option, the commission charged by Uber Eats is 17.6% (incl. gst). As an Uber Eats merchant, you can pocket more profits from the sales on Uber Eats. Alternatively, if you’ve already marked up your menu prices on Uber Eats to cover the marketplace commission of 33%, then you can pass on the commission savings by lowering your menu prices on Uber Eats. With lower menu prices on Uber Eats, you can expect potentially more sales.


CONS OF UBER EATS SELF-DELIVERY

1 No delivery staff

Obviously when you choose the self-delivery option on Uber Eats, you need to ensure you have access to your own delivery staff. However, as mentioned earlier, for Uber Eats merchants in Australia, this is not much of an issue as they can use affordable services like DeliveryTasker which lets them get food delivery contractors to deliver only for their restaurants for 2 ~ 4 hours, any time and day of the week, on-demand.


One of the biggest benefit of services like DeliveryTasker is that their food delivery contractors can also help out with store duties like folding takeaway boxes and more to help offset the cost of hourly rate payments. With over 25,000 food delivery drivers on the network, DeliveryTasker’s service is almost instant. Uber Eats merchants are usually able to get a food delivery driver to their restaurant within 1 hour to work for them for 2 ~ 4 hour delivery shifts.



UBER EATS WEB SHOP

Uber Eats web shop, simply put, is really just an online ordering website that restaurant merchants can use. The key difference between web shop and marketplace is that for web shop, no one will know about your website, it does NOT get exposure to the millions of hungry audience on the Uber Eats app. This means you will probably get zero sales from the web shop, unless you can promote or advertise it yourself.


uber eats merchant using laptop


Even though with web shop, you will be paying less commission, there’s really not much point unless there are sales coming through it.


Furthermore, if an Uber Eats merchant needs an online ordering website of their own that doesn’t charge commission (or even free to use), there are various much better options out there.


DeliveryTasker offers Uber Eats merchant a completely free to use online ordering website, plus access to delivery drivers. DeliveryTasker even runs and spends on advertising to grow sales for you each month (without you spending any money or lifting a finger!). The best part is, DeliveryTasker even runs a marketing campaign for you to divert all your customers from Uber Eats to your own online ordering website! 🤯 Imagine the growth in your profit margins 📈…


So yeah.. out of the all merchant services available from Uber Eats, web shop is the least recommended. We won’t even bother going through the Pros and Cons.



UBER DIRECT 🛵

Uber Direct is a pure delivery service offered by Uber. It’s similar to the white-label delivery service offered by Door Dash (called Door Dash Drive).


Uber Eats merchant who have their own online ordering website, can use Uber Direct (or even Door Dash Drive) to get delivery drivers to pick up food from their restaurants.


Since this is a commission free delivery service, all you pay is a flat fee per delivery. For Uber Direct the fee per delivery comprises of 2 components:

i) Base fee of $10 (excl. GST, or $11 incl. GST) plus

ii) $1.10 (excl. GST, or $1.21 incl. GST) per KM.


So for a delivery drop off that is say 3km, Uber Eats merchant using Uber Direct can expect to pay $11 + ($1.21 x 3) = $14.63 (incl. GST).


uber eats driver on scooter

The key things to watch out for the Uber Direct service is that there are other fees involved:


- Cancellation fee: payable if your delivery order does not comply with delivery restrictions. This is equivalent to the Delivery Fee plus the return trip fee (see below for return trip fee).


- Return trip fee: if a trip back to the pick-up location is initiated, you’ll be charged a fee calculated as 50% of the Delivery Fee. Return trips may be triggered: (i) if you have enabled the option for a return trip when the delivery is requested, (ii) if a proof of delivery option includes a return trip, or (iii) if a delivery person refuses or is unable to deliver an order because the order does not comply with delivery restrictions.


- Wait time fee: If a delivery person has to wait more than 10 minutes after arrival at the pick-up location for an order to be provided, a fee of $0.50 (excluding GST) per minute will be charged.


Information above sourced from here.



PROS OF UBER DIRECT

1 On-demand

Uber Direct uses Uber’s wide delivery network, which is regarded as the most reliable on-demand delivery network in Australia. We think its price is justified, given the on-demand convenience.


If you are an Uber Eats merchant with your own online ordering website, you may have low volumes of orders on your own website during the weekdays or even for the initial year until you have a built up a customer base. This means it might not be feasible to have your own in-house delivery drivers given that you need to pay them an hourly rate. Consequently, an on-demand pay-per-delivery service like Uber Direct would be more economical.


2 Delivery fee control

As a restaurant owner, you still 100% control over the delivery fee that you wish to charge your customers, even if you are using Uber Direct. You may set minimum order values of say $50 and charge your customer a delivery fee of say $11.00 (same as what most online ecommerce shops charge for next-day deliveries), and you absorb the remaining delivery cost. Or cut and split the delivery cost in any way you deem fit.


By the way, if you go to any local ecommerce websites, or even Office Works online, you can expect to pay a minimum delivery fee of $11, for delivery within the next few business days. This is not even delivery within the hour! So if you are delivering food within the hour to your customer, please don’t be afraid to charge enough delivery fee to cover your own cost. In this modern era where almost 100% of the population shop online, as consumers, we are savvy enough to know that $11 is not expensive for delivery within an hour. In fact, it’s cheap, if you start comparing that to ecommerce platforms where you pay $11 to receive the goods in a few business days.



CONS OF UBER DIRECT

1 Other fees

Needless to say, this is easily one of the “gotcha” that Uber Eats merchant and restaurants need to look out for. Given the once-off pick up and drop off nature of the delivery service provided by Uber Direct, there’s obviously less accountability by each delivery driver. This means disputes can easily occur and return trip fees, cancellation fees and wait time fees may be more common than you think.


If a delivery goes wrong with Uber Direct, as a restaurant, you bear responsibility, not Uber Eats. It’s also harder to rectify any delivery order without paying additional fees.


Unlike, Uber Direct, if you get delivery contractors from DeliveryTasker, as the delivery driver will work for your restaurant only, continuously for 2 ~ 4 hours, the driver has accountability for the full period of the shift. For instance, if your kitchen staff missed one item while packing the order, you can easily get your delivery driver from DeliveryTasker to re-deliver it again. Depending on the quote that you accepted on DeliveryTasker, the driver may choose to charge a small delivery fee for that re-delivery (usually less than $2). While misses by your own kitchen staff may only happen occasionally, you can rest assured that you have a delivery driver that is accountable for each delivery that he or she makes for your restaurant, for the duration of your shift.




Need food delivery drivers to deliver just for your restaurant?


Check out DeliveryTasker’s tailored food delivery platform, an Australian based food delivery platform with over 25,000 delivery drivers using it, offering restaurants in Australia the on-demand convenience of getting food delivery drivers to create a tailored delivery service for the restaurant, for 2 ~ 4 hour shifts.






Join DeliveryTasker's 🧑‍🍳 Local Restaurant Owner Community 🇦🇺


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