DoorDash has recently launched in Wellington with plans to expand by the end of the year. Photo / Supplied
DoorDash has recently launched in Wellington with plans to expand by the end of the year. Photo / Supplied
New Zealand's love affair with food delivery apps has blossomed since Covid hit, adding more than $162 million to the economy each year - and that's just through Uber Eats.
Kiwis have clicked on those colourful icons thousands of times a week to have food delivered - sometimes paying around25 per cent more than if they had jumped in the car and collected.
This month, newcomer DoorDash entered the scene dominated by Uber Eats, Menulog and New Zealand-owned Delivereasy - proof the industry is in growth mode.
And with the ability to order food from your phone it's unsurprising more than 25 per cent of young people are regular users - ensuring the mode of dining is here to stay.
Ordering Uber Eats at lunch - with the resulting school-gate dropoff - became so common that Auckland principals banned students from ordering food to school, citing health and safety.
A recent study by New Zealand Institute of Economic Research found as well as the $162m into the economy each year, Uber Eats generated more than 517 jobs, and paid $32m to drivers.
The study estimated food apps added around $59,000 to the 2019 revenue of the restaurants using them - about $19.6m in total. It also found about 26 per cent of the orders came from people who would not have usually chosen a restaurant meal.
Marisa Bidois, from the Restaurant Association, said despite the reported revenue gains delivery apps were not a great money maker for restaurants - instead, they used the apps as a way to get their brand noticed.
Many were clawing back profits by setting up their own delivery systems.
"The feeling amongst our members is that high commission rates, slow payments, price surges, and driver errors are making it increasingly difficult for them," she said.
"Most of our members are not seeing any profits from their delivery business but feel that there is currently no viable alternative."
Bidois said most saw signing up to a delivery app to be part of their marketing spend and utilised the platforms to help raise awareness of their brand.
"The demand for home delivery has increased and continues to do so and many members feel that if they are not able to offer this service to customers they will lose business," she said.
Bidois said an increasing number were looking at delivering their own food and signing with apps that allowed them to use their own driver for a lower commission.
The situation for restaurants had worsened in recent months, with higher prices for all basics including oil, meat and vegetables.
New Zealand-owned Delivereasy now operates throughout the country. Photo / Warren Buckland.
Restaurants were still suffering from Covid-related staffing issues and losses but were reluctant to pass on ingredient price increases to customers.
The entrance of DoorDash brought hope that increased competition would lower commission rates, Bidois said.
"We have had feedback from many members to let us know that, at the current commission rates, they are finding it tough to make products sold through Uber Eats profitable.
"However, we are seeing more choice in platforms now in New Zealand and as a result we'd expect we may see further flexibility around commission rates, or different options available."
The Restaurant Association had worked with Menulog during Covid lockdowns on deals to help boost restaurant's revenue.
One Auckland pizza shop worker spoken to by the Weekend Herald said the business was signed up to Uber Eats, Menulog, and Delivereasy as well as running their own delivery service.
The choice of app didn't make too much of a difference to the customer but for the restaurant it was significant.
"Uber Eats is without a doubt more expensive but we feel we have to be there. It is better for us if customers order through Menulog because we can use our own driver.
"It's even better if they come in or order directly through us and have us deliver."
With new players joining the growing food delivery scene, the Weekend Herald compared costs, ease of use, service and the range on offer from some of the main players.
Some platforms are easy to use, some have hidden fees and inflated online prices, and others sting the restaurants, using them with commission rates so high it makes it almost impossible for businesses to turn a profit.
When placing an order, some platforms perform better than others and make ordering easy rather than an anxiety-inducing exercise.
For this comparison, we ordered a family pack from McDonald's because it was the same price across apps ($34 compared to $29 in-store) and available on the three Auckland options of Delivereasy, Menulog and Uber Eats.
On Uber Eats, ordering the different flavours for the two medium and two small soft drinks was confusing and time-consuming because the app automatically scrolls to not only the second drink option but also the more expensive shakes and coffees.
It took some time (and a few swear words) to figure you have to scroll up to tick the first drink option to complete the order.
DoorDash is a baby on the New Zealand scene, arriving just weeks ago, and delivering through Wellington but with plans to expand across New Zealand by the end of the year.
Rebecca Burrows, general manager of DoorDash New Zealand and Australia, said the goal was to help small businesses rebound post-pandemic.
"There are some other players in the market but we do think New Zealand is underserved so us coming in will add another option, increase competition and hopefully benefit small businesses, customers and people who choose to dash," she said.
Yummi
Nelson-based Yummi was the only business to advertise the app price was the same as in-store.
George Evans, from Yummi, said the lower commission of 10 per cent plus GST meant restaurants on the platform did not raise their prices.
"We tag businesses that offer in-store prices so customers are aware they are not paying any inflated food prices," he said.
