The Hidden Cost of Convenience: How High Fees on Delivery Apps Impact Restaurants

In today’s fast-paced world, apps like DoorDash and Uber Eats have redefined convenience. With just a few taps, you can have food from your favorite restaurants delivered straight to your doorstep. For consumers, it’s a win-win: unparalleled access to local favorites, expanded options, and the ability to enjoy high-quality meals from the comfort of home.

However, while these delivery giants deliver incredible convenience for customers, the story can look very different for restaurants. Behind the scenes, many restaurants struggle to keep up with the hefty commission fees charged by third-party apps, which typically range from 15% to as high as 30% per order. These fees, alongside other hidden costs, can deeply cut into already tight profit margins, making it difficult for restaurants to thrive long-term.

Let’s take a fair look at how these apps both help and hinder local businesses—and how Partner by PassPass can empower restaurants to build a more sustainable, direct connection with customers and develop real subscription revenue streams.

The Good: The Value Delivery Apps Bring to Consumers and Restaurants

DoorDash, Uber Eats, and similar platforms bring undeniable advantages to the table. They:

1. Expand Restaurant Reach: Delivery apps make it easier for consumers to discover and try new restaurants. Smaller businesses that might not otherwise reach customers across town suddenly gain exposure to a new audience.

   
   

2. Provide an Operational Infrastructure: Many small restaurants lack the resources to implement their own delivery system. Delivery apps provide an efficient solution, saving restaurants the cost and hassle of creating and managing a fleet of drivers.

   
   

3. Offer Marketing Muscle: These apps actively market restaurants, giving them greater visibility on digital platforms and advertising campaigns.

In these ways, the convenience and added exposure are clear benefits, especially for restaurants just starting out or looking to grow their customer base.

The Not-So-Good: High Fees and Membership Models

While the benefits are real, so are the costs. When restaurants partner with delivery apps, they don’t just give up control over the customer experience—they also lose a significant portion of each sale. Here’s how:

1. High Commission Fees: Delivery app commissions can be as high as 30%, squeezing already narrow margins. For a business that runs on a 10-15% profit margin, this fee can quickly turn a profitable sale into a break-even or even a loss.

   
   

2. Membership Lock-In: Delivery apps now offer subscription memberships that encourage consumers to stick with a single app. While this can drive repeat business, it also locks customers into specific apps rather than building a direct relationship with the restaurant. When consumers think of ordering from a favorite restaurant, they associate it with the app rather than the restaurant’s brand, leading to dependency on a third-party service.

   
   

3. Inconsistent Customer Experience: Third-party apps prioritize their own brand experience over that of the restaurant. This often results in service issues (such as late or incorrect deliveries) that reflect poorly on the restaurant, even though they are outside the restaurant's control.

The PassPass Solution: A Direct and Profitable Alternative

This is where PassPass’s Partner program can play a transformative role for restaurants. PassPass offers a different approach—one that is more community-oriented and puts restaurants back in control of their customer relationships.

Here’s how PassPass provides a valuable alternative:

1. Reduced Fees, Higher Margins: Unlike traditional delivery apps, PassPass allows businesses to retain a larger portion of revenue from customer orders. Partnering restaurants can avoid the high commissions that eat into their profits, offering customers deals and savings directly without a middleman taking a large cut.

   
   

2. Direct Customer Relationships: PassPass helps restaurants connect with their customers directly, without locking them into a third-party app. Through PassPass, restaurants can drive loyalty and repeat business in a way that keeps customers coming back to them, not a delivery service. PassPass also offers a referral program that rewards businesses for engaging and activating new customers, further incentivizing a direct relationship.

   
   

3. Subscription Revenue with Partner by PassPass: Instead of paying into a third-party membership model, restaurants can leverage PassPass’s platform to build their own subscription-based community. Customers subscribe to PassPass, and participating restaurants receive a share of the subscription revenue, turning one-time orders into consistent income.

   
   

4. Building a Local Community: PassPass aims to foster connections within the local community, encouraging consumers to support nearby businesses and take advantage of deals that align with their interests. This focus on community and locality benefits restaurants by bringing in customers who are likely to become regulars and advocates for the business.

The Path Forward: Balancing Convenience with Profitability

Delivery apps like DoorDash and Uber Eats have their place in today’s market, and they can be valuable tools in a restaurant’s growth strategy—particularly for reach and brand visibility. However, relying solely on these apps can quickly become a double-edged sword, especially when high fees and membership models start to impact profitability and customer loyalty.

By partnering with PassPass, restaurants can regain control, build sustainable revenue streams, and connect directly with their community. PassPass empowers restaurants to offer the same convenience that consumers love about delivery apps, but in a way that strengthens—not diminishes—their business.

With PassPass, restaurants can continue offering great deals to customers while taking home a bigger slice of the pie. It’s all about creating a balance: leveraging the benefits of third-party apps when needed but building a future that doesn’t depend on them alone.