Business Insider: Food delivery with third-party apps like Grubhub and Uber Eats is booming, but no one’s making money. Here’s why their business is broken

  • New York just passed a temporary 15% cap on third-party delivery commissions and a limit of 5% on marketing contributions and other related fees. And Uber Eats, which just made a bid to buy Grubhub, is locked in a bitter feud with Jersey City Mayor Steve Fulop.
  • Food delivery is booming during the pandemic, and so is the conflict over how third-party delivery companies operate.
  • Now that many restaurants rely on third-party delivery for a majority of their income, the fees and commissions delivery companies charge are swallowing most of the profit.
  • Delivery companies are also far from profitable. And Uber Eats’ bid to acquire Grubhub isn’t likely to change that.

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FILE PHOTO: An Uber Eats food delivery courier closes a bag with an order during a lockdown, imposed to prevent the spread of coronavirus disease (COVID-19), in central Kiev, Ukraine April 2, 2020. REUTERS/Valentyn Ogirenko

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