Hidden price increase when buying food through Mr D and Uber Eats

Ordering a meal on Mr D and Uber Eats is substantially more expensive than buying it directly from the restaurant, even when excluding their respective delivery and service fees.

MyBroadband compared the price of ordering food from five popular outlets in-store to buying the same food items through Mr D and Uber Eats. We found that markups on food ranged from 14% to 40.5%.

The reason behind the markups on food products is documented: each platform’s delivery and service fees aren’t enough to cover operating costs and driver wages.

Therefore, rather than charging a higher delivery fee that might scare off customers, these services charge restaurants a commission to generate business through their platforms.

As a result, restaurants have to hike the prices of their products sold on Mr D and Uber Eats to compensate for the commission.

Many South Africans are willing to pay these higher per-item prices on fast food for the convenience of on-demand deliveries.

In previous feedback to MyBroadband, Mr D and Uber Eats said they wouldn’t disclose the commissions they charge restaurant partners.

An Uber Spokesperson said the commissions are in place to contribute to the growth and success of the sector and facilitate earning opportunities for merchants and drivers on the platform.

“Merchants on the Uber Eats app have the ability to determine their own pricing for diverse items from their stores available to consumers on the platform,” the spokesperson said.

“We are dedicated to supporting small restaurants as well as enterprise players through partnerships that focus on providing access to the Uber Eats marketplace and critical training and resources.”

Mr D said that while it charges restaurants a commission to sell on its platform, the businesses on its platform are entirely in control when setting their pricing.

Prices 14% to 40.5% higher

MyBroadband compared the cost of ordering various food products from McDonald’s, Nando’s, KFC, Rocomamas, and Kung-Fu Kitchen on Mr D and Uber Eats to ordering them directly in-store.

Mr D and Uber Eats’ pricing was identical for products compared from Nando’s, KFC, Rocomamas, and Kung-Fu Kitchen. However, the markups differed for McDonald’s.

Uber Eats’ pricing for a 10-piece order of chicken nuggets from McDonald’s is 25.7% higher than ordering it in-store, while Mr D’s markup amounted to 30.1%.

The markup difference was significantly more when ordering a Big Mac burger on its own. Uber Eats’ price for the burger is R64.70, 24.7% higher than the in-store price.

Mr D’s price for the burger is R71.90, which is 38.5% more expensive than buying it in-store.

This trend of Mr D’s higher pricing for McDonald’s food was consistent across the four products we compared.

Both Mr D and Uber Eats charge between 24.50% and 25.30% more for food ordered from Nando’s.

We compared prices for a Nando’s Hotpot, 1/2 Chicken, Da Malva Pudding, and Perinaise, Avo, and Caramelised Onion burger.

The markup on the burger from Mr D and Uber Eats was the highest at 25.3%, while the markup on Da Malva was the lowest at 24.5%.

Uber Eats and Mr D charge 25% more than the in-store price for 10 Zinger Wings and a Streetwise Two meal with chips from KFC.

The markup on a KFC Zinger Burger is slightly lower at 22.70%, while Mr D and Uber Eats’ pricing for the Wicked Zinger Box Meal is 18.60% higher than in-store.

Uber Eats’ and Mr D’s markups on Rocomamas meals were markedly higher at between 30.3% and 31.4% compared to in-store prices.

However, the markups on meals from Kung-Fu Kitchen were the highest across the five restaurants compared, ranging from 40.4% to 40.5%.

The table below compares the in-store product prices of five popular restaurants with their prices on Mr D and Uber Eats. Note that prices exclude delivery and service charges.