Fast food delivery price pain in South Africa

South Africans pay a hefty price for the convenience of ordering from some popular fast food restaurants through delivery services like Uber Eats and Mr D.

However, while some fast food establishments charge premiums as high as 54%, the markups on meals from some popular fast food restaurants are significantly lower. 

This is because restaurants on these platforms decide their own pricing. Head of operations for Uber Eats Sub-Saharan Africa Charles Mhango previously told MyBroadband that it doesn’t ask questions about their pricing strategies.

“Regarding the pricing of items via the Uber Eats app/marketplace, each merchant determines its own pricing for each item that will be sold via the app,” he said.

“Uber Eats does not request or require merchants to disclose the rationale behind their pricing strategies (including any inputs into their ultimate pricing) as this would constitute each merchant’s proprietary, business-sensitive information; we respect that this information may be competitively sensitive.”

Takealot-owned Mr D also said restaurants on its platform have control over setting their prices.

These services charge restaurants a commission or merchant fee to fulfil orders through their platforms, as the service and delivery fees aren’t enough to cover their operating costs and driver earnings.

Mhango said the merchant fee is commercially sensitive and varies between merchants and locations.

However, several reports citing restaurants using the platforms say the merchant fee is typically around 30% of the value of the products in an order.

Therefore, the restaurants must inflate prices for products sold on the food delivery platforms to cover the commission and sustain profit margins.

Uber Eats then adds delivery and service fees that vary per order. Mr D only charges a delivery fee.

According to an Uber Eats FAQ page for merchants, the service fee is calculated as a percentage of each restaurant order made through its platform.

Restaurant vs delivery app price showdown

MyBroadband compared restaurant pricing to Mr D and Uber Eats for three meals from five popular fast food restaurants to get an idea of the premiums they charge for delivery.

We compared prices for McDonald’s, KFC, Mochachos, Romans Pizza, and Nando’s. While the delivery premiums for four of the restaurants were identical, McDonald’s markups varied between Uber Eats and Mr D.

On Mr D’s platform, McDonald’s charges a higher premium than on Uber Eats for its Big Mac Medium Meal and Cheeseburger Happy Meal with Fries, 32.97% and 32.06%, respectively.

It charges a premium of 32.11% on medium vanilla, chocolate, and strawberry milkshakes.

McDonald’s markups for the Big Mac Meal and Cheeseburger Happy Meal were slightly lower on Uber Eats, at around 30%. However, the price on Uber Eats’ platform is nearly 54% higher than in-store for medium vanilla, chocolate, and strawberry milkshakes.

The remaining four restaurants’ delivery premium on Mr D and Uber Eats were identical; however, they varied significantly between restaurants.

The premium on Nando’s meals ranged from 24.72% to 25.64%, while Romans Pizza’s markups were all slightly over 25%.

KFC adds between 20.03% and 22.01% to its meal prices on Uber Eats and Mr D. Mochachos charges the lowest premium of the five restaurants compared with a maximum of 16.69%.

The table below compares restaurant pricing to Uber Eats and Mr D for various meals from popular fast food restaurants in South Africa.

Meal	Restaurant price	Uber Eats price	Premium	Mr D price	Premium
McDonald’s
Big Mac Medium Meal	R81.90	R106.50	30.04%	R108.90	32.97%
Happy Meal Cheeseburger with Fries	R49.90	R64.90	30.06%	R65.90	32.06%
Medium Vanilla/Chocolate/Strawberry Milkshake	R35.50	R54.60	53.80%	R46.90	32.11%
KFC
9-piece Bucket	R149.90	R182.90	22.01%	R182.90	22.01%
All Star Lunchbox with Buddy	R82.90	R99.90	20.51%	R99.90	20.51%
10 Zinger Wings	R74.90	R89.90	20.03%	R89.90	20.03%
Mochachos
Chicken Burger, Beeg Chips, and Buddy	R95.90	R109.90	14.60%	R109.90	14.60%
Chicken Burrito, Beeg Chips, and Buddy	R109.90	R124.90	13.65%	R124.90	13.65%
1/2 Chicken	R89.90	R104.90	16.69%	R104.90	16.69%
Romans Pizza
Large Margherita	R79.90	R99.90	25.03%	R99.90	25.03%
Large Pepperoni	R79.90	R99.90	25.03%	R99.90	25.03%
Garlic Bread Supreme	R39.90	R49.90	25.06%	R49.90	25.06%
Nando’s
Fiesta Roll + Single side	R78.00	R98.00	25.64%	R98.00	25.64%
1/2 Chicken	R99.00	R124.00	25.25%	R124.00	25.25%
Chicken Burger + Single side	R89.00	R111.00	24.72%	R111.00	24.72%