The food delivery bubble is bursting – and maybe that's not a bad thing

The on-demand food delivery industry, which saw significant growth during the pandemic, is now facing challenges that suggest a potential collapse. Despite a surge in revenue from $90 billion in 2018 to $294 billion in 2021, major delivery companies like GrubHub and DoorDash have accumulated over $20 billion in operating losses since going public. Customer dissatisfaction is rising due to high fees, long wait times, and cold food, leading many to question the value of using these services. Restaurant owners report that the commission fees charged by delivery apps, which can range from 15% to 30%, severely impact their profits, often leaving them with minimal earnings per order. Couriers also face declining profitability due to rising operational costs and reduced tipping. As a result, some consumers are reconsidering their reliance on these apps, with reports indicating that delivery fees can sometimes exceed the cost of the food itself. Alternatives like ChowNow and Slice are emerging, focusing on fair wages for drivers and lower fees for restaurants. Experts suggest that a more sustainable approach may involve customers directly contacting local restaurants for takeout or delivery, fostering a more equitable relationship between consumers and eateries. The current state of the food delivery market indicates that while the convenience of these services is appealing, the underlying economic model may not be sustainable for all parties involved.