Lizzy and Lissa break down the hidden costs – financial and otherwise – of food delivery. Food delivery apps can offer a lot of convenience but they can also take a toll on your finances, from sneaky service charges to inflated menu prices and tempting convenience that encourages overspending. What do you think – are they worth it?
Lizzy and Lissa break down the hidden costs – financial and otherwise – of food delivery. Food delivery apps can offer a lot of convenience but they can also take a toll on your finances, from sneaky service charges to inflated menu prices and tempting convenience that encourages overspending. What do you think – are they worth it?
Main Topics
00:00 Introduction and Personal Experiences with Food Delivery
01:11 Running The Numbers Segment
03:43 Cost Breakdown of Food Delivery
17:08 Our Preferred Apps
21:51 Financial Costs and Inconveniences
30:05 Impact of the Pandemic on Food Delivery
30:46 Ghost Kitchens
34:31 Budgeting for Food Delivery
40:24 20 Cents Segment
References for Statistics
https://www.businessofapps.com/data/food-delivery-app-market/
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10163566/
https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/
https://pos.toasttab.com/blog/on-the-line/food-delivery-trends
Lissa: When is the last time you ordered from a food delivery app?
Lizzy: I think about two days ago.
Lissa: Oh, okay. I think me too.
Lizzy: No, yesterday, groceries.
Lissa: Oh, okay.
Lizzy: Yesterday. What about you?
Lissa: Yeah, same thing. Either two days ago, we ordered food just because we didn't want to cook.
Lizzy: So the real question was, was it worth it?
Lissa: Is food delivery worth it? Let's talk about it. Welcome to Net Net with Lizzy and Lissa, where we analyze hidden costs and empower you to make your own damn decisions in life. Each episode covers a different facet of life, and at the end of each episode, we each give our takes on whether we think something is net positive or net negative.
Lizzy: I'm Lizzy, a strategist and consultant with almost 20 years of experience in finance and investing.
Lissa: And I'm Lissa, a personal finance expert and accredited financial counselor. We're best friends who talk about money.
Lizzy: And everything else.
Lissa: Is food delivery worth it?
Lizzy: First up, running the numbers on food delivery.
Lissa: According to the Business of Apps, DoorDash is the most popular food delivery app in the United States with over 50% market share. If you include Caviar, who DoorDash purchased in 2019, DoorDash actually has 67% of the market share.
Lizzy: Wow. That actually surprises me.
Lissa: Yeah. Because I don't use DoorDash.
Lizzy: I don't either.
Lissa: I'll talk about that later.
Lizzy: Yeah, let's talk about it.
Lissa: I don't use DoorDash.
Lizzy: Interesting. All right. Well, Statista, who includes food delivery and grocery delivery in their estimates, says revenue in the online food delivery market is forecasted to reach $1.2 trillion in 2024. Food delivery apps comprise a smaller share of that compared to grocery delivery, which is also interesting.
Lissa: Yeah, I wouldn't have thought that a lot of people... There's more money in grocery delivery.
Lizzy: Yeah, not at all.
Lissa: ToastTab conducted a survey in 2024 that found 47% of respondents are willing to pay $3 to $6 in delivery fees. I do it, but I'm not willing. I don't want to.
Lizzy: That's not what that means.
Lissa: Okay. I guess I-
Lizzy: You're not happy about it, but you're still doing it.
Lissa: This is not a satisfaction score. It's a, "I do it."
Lizzy: You do it.
Lissa: Okay.
Lizzy: For sure. Okay. 40% of respondents in that same survey reported using food delivery apps or ordering takeout three to five times a month. That doesn't surprise me at all.
Lissa: Three to five times?
Lizzy: Yeah. Not at all.
Lissa: Well, interestingly, in another survey, which is from the National Library of Medicine, they did a study in 2023 more focused on younger respondents with an average age of 21.8 years old. 71% of them were full-time students. They found that weekly food delivery app usage was two times per week. So eight times a month.
Lizzy: Eight times a month. Okay. It's almost double or at least double.
Lissa: Which is surprising because college kids don't really have money like that to be spending on $3 to $6 worth of fees.
Lizzy: But if it's normalized for them because they've had it their whole life, we'll talk about that.
Lissa: Yeah, maybe.
Lizzy: I got some stories about my younger brother. What is he? What's after millennial?
Lissa: Gen Z.
Lizzy: Is he Gen Z?
Lissa: Yeah.
Lizzy: Okay. Yeah, he's a Gen Z.
Lissa: Well, we know that there is more to life than numbers and statistics, so let's talk about it. Is food delivery worth it?
Lizzy: Okay. So first of all, the cost of food delivery, you have your baseline prices of the goods, many of which are marked up when they're listed on the app. So a meal that's $15 at the store might be listed on the menu as $18. Then you have the transaction fees from the app, you have delivery fees, you have your normal tax and tip for the driver. And in my experience, sometimes that can double the meal.
Lissa: Yeah. There are also optional fees. Now you can pay to have it delivered straight to you for priority. I do that 100% of the time, which is an extra $3.
Lizzy: Really?
Lissa: Yeah. And I'll tell you. Well, the quick reason why is I don't like my food cold.
Lizzy: That's so interesting because where I'm living now, it's not like living in the city where there's as many people. So in Simi, the priority is four minutes faster, the range it gives. So I've never done it because it just doesn't seem worth it because I'm like, "Why would I pay $4 for maybe four minutes?"
Lissa: But for me, what it does is I think sometimes they give you an estimate that you'll get it five minutes faster. But I've had times where I didn't pay for it, that it wasn't five minutes slower. It was 30 minutes later I got my food because they had five other deliveries ahead of me.
Lizzy: I do remember one time we ordered pizza. That thing took an hour and a half.
Lissa: Yeah.
Lizzy: Yeah. Okay. Well, I don't think I've had that challenge so much, just because I live in a much less dense area.
Lissa: Where you live. Okay, so it's different.
Lizzy: But I could see that in a more populated area. So then you have that other fee. So what's your experience like? Is the average cost of the fees relative to the cost of your order?
Lissa: I think at least a 50% markup. So if I'm ordering $30 worth of food for me and Alan, the whole delivery is 45 minimum plus. So I don't always see it double. It's not that we're ordering $30 of food and we're paying 60. Sometimes it feels like that. Sometimes it ends up being like that.
Lizzy: Well, it's for smaller orders too, if I'm ordering just for myself. I don't order meals that often, probably within the three to five range, but some of that is because I'm living with my mom who loves to order food, and so she's like, "Let's just do it." So the other night, it was Friday night, I was chilling, had a busy work week, and I'm like, "I'm going to order dinner for myself." I didn't order anything crazy. I got Panera, soup and salad. The base meal was $20, which is wild, super inflation slash at prices. But then with tip and everything else, it was 35. So almost double for a cup of soup and some salad. It was delicious though. Oh, my God, tomato soup.
Lissa: I just thought of this. So last week I was out of town. I was at an exam review class for four days in a row, 10-hour long days with a 45-minute lunch break. I ordered food every day because I had to have it delivered right when my lunch started so that I'd have time to sit and eat and then get back to class. And so I must have spent hundreds last week on my food altogether.
Lizzy: Yeah, I was going to ask, I know you track your finances in a lot of detail and if you've ever tracked the cost of delivery relative to the actual just cost of the meal, right? Assuming you were just to go pick it up, because that's the thing that kills me, and so I will often order from an app and go pick it up because what am I really paying for?
Lissa: Yeah. Well, convenience. That's what I pay for.
Lizzy: Well, yeah, I understand that, but that's a hard justification for me in certain scenarios.
Lissa: Yeah. Yeah. It depends. So if it's something relatively nearby and the reason we're ordering is because we don't have any groceries, the convenience of it, just because we're hungry, we know we don't have time to prepare food today. If it's close enough, then yeah, Alan usually doesn't mind going to pick up the food. I'm just like, "All right, I'll stay at home. I'll be here. You go." Because otherwise, we might as well go together and eat there or something.
Lizzy: Sure.
Lissa: But I would say other times, we just go ahead and eat the cost for the delivery because it's not only that we don't have food at home, no groceries, but we're also tired or just can't get ourselves to get in the car and go somewhere, especially if it's, I don't know, peak traffic hours.
Lizzy: Yeah, I understand. For sure. For sure. I do think that also is a factor in where you live. And that for me, because there's very little traffic and it's easy to park and all that stuff, it's not that big of a deal to go. Even a few miles is five minutes for me. Whereas I don't know that I would've done the same. When I was living in the city, I just didn't order a lot to begin with, but I had so many options within walking distance, four minutes. So it was a little different then. Interesting.
Lissa: Yeah, that too. So I do wonder then by geography, by city, how it differs in statistic of usage of these apps.
Lizzy: Sure.
Lissa: Because if you live somewhere that's walkable to a lot of food places or if you live somewhere that has no traffic and it's easy to get to anywhere you want to go, you're probably less likely to. What are you paying for at that point?
Lizzy: Yeah. Well, I've noticed, this is just anecdotally as I've traveled so much for work or whatnot, that in smaller areas the options seem much, much more limited. And that's natural versus a big city anyway, but it's your standard McDonald's chain restaurants that you can get delivered.
Lissa: Yeah. Okay, rarely will I ever order for delivery for a fast food place.
Lizzy: So what are your personal standards for when you will get food delivered? Because everyone has their rationalizations of what is acceptable and what's not.
Lissa: Well, my rationalization for fast food is because it's so cheap. So I actually had to grab a quick meal before this because I didn't have time. I don't eat fast food often, but I did today. Literally, my meal was $6 all in with taxes and everything. And so if I were to have that delivered to pay more than-
Lizzy: That's what I'm saying.
Lissa: Yeah.
Lizzy: Relative to cost of the order.
Lissa: Relative to the cost of food.
Lizzy: The cost of food.
Lissa: Right. Whereas if I have friends over, say there's eight of us there, we're hanging out and we're going to order some pizzas, I'll have that delivered easy because we're now ordering 100, $200 worth of food. I know, we eat a lot.
Lizzy: Yeah, we do.
Lissa: I was like, "That sounds like a lot." Yeah, pizzas. And then we're all having fun. We're not going to go out of our way to go get the food. Let's just wait for it here. So then the relative cost of the delivery to that 100 to $200 worth of food is a fraction of it, 10% of it.
Lizzy: I think that's my logic, whether I am consciously making that decision, which sometimes I am or not, it's relative to the cost of the order. So even with one other person, I'm more likely to get food delivered than just myself. And I don't really have any qualms about getting groceries delivered because that's always over $100.
And so the incremental, with the app that I use, it's $10 including tip and delivery fee. So an extra 10% is a no-brainer for me to not have to spend that 45 minutes or whatever. And it has all my preferences and it takes five minutes. So to me, it's $10 almost an hour in time.
Lissa: It's so funny. You know what I just thought of? A lot of the reason that I do justify food delivery when I do do it is the time saved, right? Cooking and just not having to leave home. But interestingly, I don't do grocery delivery. I live walkable to a Whole Foods. It's a eight-minute walk.
But I actually like walking to Whole Foods, doing my groceries, walking down every aisle and walking home to get steps and more exercise in. But it's funny because in a sense, I could save time.
Lizzy: For sure. Yeah. But it's time you enjoy.
Lissa: Yeah. But then I don't mind it.
Lizzy: I don't particularly like grocery shopping, and I usually order it on a Sunday when I'm going to meal prep already. So adding in grocery shopping makes it feel like a really big thing that I have to do. And I shop at Sprouts, which is not super close to my house, and it's just way easier for me. It feels that way. So I don't have a single hesitation about ordering for that.
Lissa: I have some annoyances with grocery delivery.
Lizzy: Oh, I've got some too.
Lissa: Okay. You do. Okay.
Lizzy: Hell yeah.
Lissa: Because when you go to the store, this is something, I don't know, my mom taught me. If you're going to buy eggs, you got to check that every egg is not broken. And when you are not the one choosing... And I also go for the one that has the expiration date the furthest out.
Lizzy: For sure.
Lissa: Yeah, just because.
Lizzy: Yeah. I used to have a lot of issues when I used Amazon Fresh. So I did that-
Lissa: They would give you the expired stuff, right?
Lizzy: They would give me shitty produce or whatever. I first used Amazon Fresh. This was when I was commuting down to Irvine. This was several years ago. So grocery delivery technology has improved, in my opinion. And I would regularly get just the worst selection of produce or they just wouldn't get enough.
Lissa: Yeah, the brown bananas.
Lizzy: Or the substitutions would be incorrect, especially in terms of volume. So one of the things I have found is on the app, I'll order a value pack of chicken because I need a certain amount because I'm making it for the week. But if they don't have that specific one, they would substitute it with a smaller pack of chicken.
Lissa: As opposed to a different brand.
Lizzy: As opposed to a different brand, right?
Lissa: Instead of drumsticks, get you the thighs or something.
Lizzy: Yeah. But I'm like, "Well, this is not enough now. Now I can't use this."
Lissa: Can't do anything.
Lizzy: Or if you have a specific recipe and they don't get it. So that's challenging. Now I find that they're pretty good about asking for substitutions. They'll text you and you can pre-select substitutions. If it's something that you order all the time, it saves it. So I think that part has gotten better, but I still have those issues. Maybe every third or fourth time there's something that's not ideal.
Lissa: Yeah. Okay. So financial costs, we're getting into it. Obviously, there's some kind of surcharge for the service fee, delivery fee, and now you're tipping someone too, as opposed to going to grocery store, going straight to a food counter. I would say at a restaurant you still tip, but other places where you pick up food, you're not tipping every time.
Lizzy: I'm not tipping if I pick up from a restaurant.
Lissa: But it's tough when they-
Lizzy: If they don't provide any service except handing me the food, I don't tip. For what? I tip generously.
Lissa: But they flip the little screen on you and how do you say no?
Lizzy: I say no. I don't tip if I'm picking up.
Lissa: All right.
Lizzy: I did all the work.
Lissa: That's true. What if they're really nice and they give you extra sauces and stuff?
Lizzy: Sometimes. You want to know what's funny? I bought a smoothie earlier and I tipped $2 because the guy helped me. I had a complicated order and that's really not any different. But I tip when I get coffee now, that's where I feel the pressure.
Lissa: Yeah, because they're going to make your coffee after you-
Lizzy: Yeah. But a hostess...
Lissa: Yeah.
Lizzy: If I could tip the chef, I'd tip the chef.
Lissa: I know. They should have different buckets for different people.
Lizzy: And I don't want to shit on hostesses. Hostesses are great, but in that specific instance, they didn't do a whole lot for me.
Lissa: Right, right, right. Okay. Interesting.
Lizzy: Anyway.
Lissa: Interesting.
Lizzy: We digress.
Lissa: We digress. So there are fees, there's tips. You said there's a markup on delivery food.
Lizzy: Yes.
Lissa: On menus.
Lizzy: So this is my little hack. I've noticed this specifically with a few different ramen places or pho places that I would order from. I'd be like, "That pho is 17.50 and I don't remember it being that." So then I would go to their website and order direct, and it's cheaper than when it's listed on Grubhub or Uber Eats or whatever.
Lissa: Because they've got to pay Grubhub, right?
Lizzy: Yeah, exactly. So they're covering their platform fees or whatever, or they just know that they can because it's getting lumped in with all of this other stuff. So that's a little hot tip. Not every restaurant has that, but if you can, you want to go direct to them because they keep more-
Lissa: Money.
Lizzy: They keep more of it anyway.
Lissa: So win-win for everyone except for the app.
Lizzy: Yeah.
Lissa: Yeah. It's the convenience though of the app.
Lizzy: The convenience. I know.
Lissa: You can write your little notes, you can make sure everything's on there.
Lizzy: All right. Let's talk about apps.
Lissa: Oh, yeah.
Lizzy: Which apps do you favor?
Lissa: Well, currently, I favor Uber Eats.
Lizzy: I do too.
Lissa: And then obviously, in Europe and the UK, Deliveroo is the main one that we use when we're over there.
Lizzy: Okay.
Lissa: Yeah. DoorDash here in the US I stay away from.
Lizzy: Do you have a specific reason?
Lissa: Yeah. Because there was a span of time, at least a six-month span of trying DoorDash, where my success rate was 50%, as in getting the order period, but getting the order with the right things in them, unopened. I had so many issues. And I actually don't know too much about training because DoorDash drivers, Uber Eats drivers, are they all independent contractors?
So I don't really know what goes on behind the scenes with the company and these independent contractors of training or what they're supposed to do and how they're supposed to act. But when I was doing DoorDash for a while, I had people steal my order and not ever deliver it. I had open... I think you had what? Open?
Lizzy: Man.
Lissa: Yeah. What's that story?
Lizzy: Yeah. I am a gifter of food delivery. So if I have an employee that did a great job, I'll send them a gift card for 30 bucks or whatever, just as a little thank you. Or in this case, I was newly dating someone and they had a pretty hard week and so I sent them this Persian ice cream that we had gone and tried previously. It was really, really good, hard to find.
And so I delivered it to them as a surprise, and the person delivered it. They were a little confused like, "What's going on?" And then they were happy and they opened it up. And this is a pint of ice cream freshly packed, and it had a spoonful out of it, a big old honking spoonful out of it. There's no other possible excuse for this except someone bit into it.
Lissa: Except the driver, the only other person-
Lizzy: The driver. The driver-
Lissa: ... who had access to it.
Lizzy: ... ate some of this ice cream. So then, of course, it's ruined. You're not going to eat ice cream-
Lissa: Was that DoorDash?
Lizzy: I think it was DoorDash, I'll be honest with you.
Lissa: So I don't have a story like that for DoorDash, but it was a lot of things like that with DoorDash till finally, I deleted the app from my phone. If I order, it has to be Uber Eats or something else.
Lizzy: Yeah. I don't have a super specific reason. I will still use it occasionally, but for whatever reason, I started using Uber Eats probably because I am already using the Uber app and it just seems like a better experience. The people have been really nice, the in-app experience is really positive. It feels really fast. So I don't know. Maybe-
Lissa: But that's what I wonder. How does DoorDash have the biggest market share? Is it just that they have more restaurants?
Lizzy: I feel like they were definitely before Uber Eats, so I think they were one of the first ones and then just became known for it. And so people who are early adopters or casual adopters who aren't going to app search, I think that's probably what they use. But that might be a benefit. Because if you're using Uber Eats, you're competing with fewer people for drivers and resources, right?
Lissa: Right.
Lizzy: Is that the way it works?
Lissa: Maybe.
Lizzy: I don't know.
Lissa: It could be.
Lizzy: Yeah.
Lissa: Yeah. So anyway, I could be super biased, obviously, against DoorDash because of those particular experiences, and it could be those individual drivers who mess it up for me. And that was years ago. The fact that they're huge still and growing, I imagine maybe they've made some changes. Maybe it's not as bad as I perceive it to be, but still, because I made that switch, if I'm going to order, I'll use Uber Eats.
Lizzy: Okay. Okay. I feel you. That makes sense. All right. What other-
Lissa: Do you order not grocery delivery, but food delivery?
Lizzy: I do.
Lissa: And what do you use?
Lizzy: I do it using Uber Eats almost exclusively. Yeah. I just got in the habit of that. I used to use Grubhub, but then, I don't know, I felt like I had different accounts and I logged in and never knew, I didn't remember my password. I don't know, it just felt clunky. And then Uber, I'm always using it.
Lissa: Probably should have done more research for this episode, but I think there's a difference between, maybe it's Grubhub versus how DoorDash and Uber Eats are. One is just a network that connects people, or I could be thinking of a different one.
Lizzy: Oh, interesting.
Lissa: Yeah, I think their business models are slightly different.
Lizzy: Yeah, we should've looked that up. For sure.
Lissa: Yeah, we should have looked that up.
Lizzy: Next time.
Lissa: Besides the point, the point is financial costs are major.
Lizzy: 50% plus.
Lissa: 50% plus.
Lizzy: Well, depending on order size. But you're paying for convenience, ease, sometimes time back, sometimes surety of delivery, knowing that it's going to be on my doorstep when I get home kind of thing.
Lissa: I will say another cost. Well, this is also related to the financial cost. Those times that I've had orders lost or missing or whatever, calling or having to chat with support is just a waste of my time.
Lizzy: And the hunger.
Lissa: And the hunger. Oh, my God. I don't know how many times I was upset with the app. I was chatting with a person on the app and I'd be like, "Look, I know it wasn't you, but my frustration is I've already waited 75 minutes for this food and you're telling me to order again."
Lizzy: It's lost in the void.
Lissa: And it's lost in the void.
Lizzy: Where's my food at?
Lissa: "And then I got to wait another hour. I'm hungry now, and then all you're going to give me back is $2 and 71 cents or whatever."
Lizzy: Right. Or they get your order wrong or forget something and then you're like, "Do I fight for that one missing item? Is it worth it?"
Lissa: Yeah. So you just let it go.
Lizzy: Yeah. You let it go. Yeah, I do at least. Yeah, challenges.
Lissa: It adds up.
Lizzy: And sometimes you can't customize as much. Sometimes they have slightly different menu options, so there are limitations to it, for sure.
Lissa: Yeah, I didn't even think of that too. Which also leads me to think about benefits of eating out from an establishment, a restaurant as opposed to cooking at home. Some of the upsides of that is trying different cuisines, other ingredients or whatever. But quality, when you have it delivered, goes down a lot of the time, no?
Lizzy: Yeah, versus eating in a restaurant. So something that I think about is if I do order, one of the things I fairly regularly order with my mom, let's say, once a month, is we'll order some kind of sushi. It's definitely not the same experience as sitting there with your little dishes and whatnot. But I think about Korean food where you have all the little... You can't replicate that experience.
Lissa: Although, last week, one of the places I ordered from was BCD Tofu, and it was interesting because they didn't allow me... For them, in particular, this was in Irvine, you couldn't write notes to modify the order, which is sometimes a limitation too.
Lizzy: For sure.
Lissa: Because I wanted to say, "No green onions." I was like, "You know what? Whatever, just give it to me as is."
Lizzy: Sacrifice.
Lissa: But the order said that it was going to give you tofu soup and then banchan, which is all the little side dishes when you go to a Korean restaurant. And I was like, "How are they going to do this?" Because they give you 18 different things.
Lizzy: I know.
Lissa: So they actually did give four different ones. I didn't get to choose or anything, but they gave kimchi and a couple of other ones. So they found a way.
Lizzy: But it's not the same.
Lissa: It's not the same.
Lizzy: Yeah. Which also makes me think another cost, for sure, is the packaging, the environmental cost.
Lissa: Oh, yeah.
Lizzy: So sometimes they do it really complicated. I have ordered pho, delivered many times, and so then they separate the noodles and the broth and then the fixings and the packaging can get really elaborate depending on what you order. And sometimes that means that your meal can get all messed up and sloshed around or it's a waste. It's just a definite environmental cost versus in the restaurant you're using real dishes and a lot more sustainable.
Lissa: A huge environmental cost. Yeah. Because you would imagine that's probably why a lot of these places mark up their menu as well to account for those costs.
Lizzy: Yeah. Paper goods, packaging, bags, all that stuff, utensils. That's why they ask now if you want to include utensils and napkins, because that incremental cost over thousands of orders really adds up.
Lissa: Especially if people don't use them. So now you have to proactively ask for it.
Lizzy: Yeah, all the little sauces.
Lissa: Like they used to do with ketchup, you have to ask for it because they won't just give you a whole handful.
Lizzy: Yeah, which is smart. On one hand, it can be annoying, but if that's been the expectation for so long, but not everyone uses it, so why are we wasting this stuff? That's definitely a big cost that I think about sometimes. And I'm like, "[inaudible 00:26:32] that."
Lissa: Do you think there's an environmental cost with the cars that have to drive to deliver?
Lizzy: For sure. Absolutely.
Lissa: But wouldn't that just be offset by you going out to go get it?
Lizzy: I think it depends because some people are going to do it versus staying in, but they might get something they wouldn't otherwise order because it's so convenient. The flip side of that though is that... It's not the exact flip side, but it also creates jobs or boost the economy. And I think it expands the capacity of a restaurant. So let's say you're a small restaurant and you only have 10 tables, you can serve way more people and grow your revenue significantly by doing delivery.
Lissa: Yeah. I do like that side of it, that it can help small businesses and the gig economy. Because people will do that on the side, do a couple hours a week of delivery.
Lizzy: For sure.
Lissa: And be able to supplement their income.
Lizzy: Yeah. Talk about side hustles.
Lissa: Oh, yeah.
Lizzy: I'm curious. There's probably stats on this on if restaurant eating in-
Lissa: Has declined.
Lizzy: ... has declined.
Lissa: That's a good question. I don't know. I think it might depend on the restaurant because like you said, there are smaller restaurants that probably don't get a lot of foot traffic to begin with, and then they get to increase sales because when people see it on an app-
Lizzy: It's advertising for them.
Lissa: Yeah, they could throw in coupons.
Lizzy: People can discover them. Yeah.
Lissa: A lot of the ones around where I live have a buy one get one free-
Lizzy: Hell yeah.
Lissa: ... Thai iced tea.
Lizzy: Thai iced tea. Yes.
Lissa: Yeah. So it's like, "Okay, cool." But then I don't think so much that it changes foot traffic in, I don't know, really popular, trendy restaurants. They'll still get their people who like the ambiance and the environment. I think it depends.
Lizzy: So that's another benefit is that discoverability for lesser known restaurants, you can increase your audience significantly.
Lissa: Yeah.
Lizzy: Interesting.
Lissa: Do you know anyone who's ever done food deliveries?
Lizzy: No one's coming to mind.
Lissa: No?
Lizzy: No. What about you?
Lissa: No, I think I've had friends do just ride-shares, but I can't think of anyone who's done food delivery.
Lizzy: And so I wonder for people that do Uber Eats, do they also do regular Uber and what the difference is?
Lissa: I think sometimes. Yeah.
Lizzy: Why you would choose to do one over the other? I wonder which tips better.
Lissa: Well, some people don't like to deal with the people because for food delivery apps-
Lizzy: That's fair.
Lissa: ... a lot of times people now just have instructions of, "Leave it on my doorstep."
Lizzy: That's what I do.
Lissa: Yeah. Because then you don't... Non-contact. The pandemic-
Lizzy: The pandemic.
Lissa: ... changed a lot of things. I will say I've had some pretty amazing food delivery drivers as of late.
Lizzy: Really?
Lissa: Ones who go out of the way to meet me where I need them to meet me. And even the other day, this was also in Irvine, I ordered food and I didn't add utensils, I forgot. And he had a pack of utensils in his car.
Lizzy: Look at this guy.
Lissa: Yeah. And he was like, "In case they didn't give you utensils, here's a fork." There was nothing weird about it. It was clean. It was a brand new fork.
Lizzy: Yeah. Sure, sure, sure.
Lissa: And I was like-
Lizzy: Going above and beyond.
Lissa: Yeah.
Lizzy: All right.
Lissa: All right. And you think about it, that's smart because that move, I might've probably tipped-
Lizzy: Yeah, for sure.
Lissa: ... more than a fork is worth, right?
Lizzy: Yeah, absolutely. Just for the thoughtfulness.
Lissa: Just for the thoughtfulness.
Lizzy: I respect it. Some other thing I thought of when we were talking about the pandemic effect, obviously, during the pandemic, people couldn't go into restaurants, so having food delivery was critical and helped sustain restaurants that otherwise might've closed. Many restaurants did close, unfortunately. And two other interesting things came up with the pandemic. One was alcohol delivery. At least in California, that was not a possibility otherwise. And I don't know if you know, you can still do that. It still continues.
Lissa: Oh, really?
Lizzy: Yeah. My parents will do it sometimes.
Lissa: Oh.
Lizzy: Get cocktails delivered with their food.
Lissa: From a restaurant?
Lizzy: From a restaurant. Yeah.
Lissa: Okay.
Lizzy: The other thing is ghost kitchens.
Lissa: Oh, yes.
Lizzy: So that emerged. If you're not familiar with the term, that's where you have a commercial kitchen that doesn't have a restaurant storefront that you can order from. And on an app it might look like a restaurant or have that branding, but it doesn't actually exist as a place where you can go dine in. And there's a lot of mixed feelings about that.
Lissa: I don't like them.
Lizzy: You don't like them. What are your thoughts?
Lissa: Well, I think first and foremost, my first couple of experiences with these ghost kitchens were they were, I don't know, a sister restaurant of a restaurant that actually exists. So I don't have one off the top of my head, but if there was a restaurant that I like to go to and I typically order from, I assumed it's the same thing when you're ordering from the app.
Meanwhile, it's this random old kitchen that you can't even go there in person because it's not a place you're allowed to go. It's just for delivery drivers to pick up the food. My first couple of experiences, definitely the quality, way subpar compared to the actual restaurant.
Lizzy: Really?
Lissa: But I don't know if that's just my experience.
Lizzy: Yeah.
Lissa: Yeah.
Lizzy: I had a perception that that was going to be the case. I don't know if that's actually been my experience because sometimes I'm not sure that I've known if they're a ghost kitchen or not. I'm like, "Oh, this new place."
Lissa: Because there's no requirement that they have to tell you, right?
Lizzy: No, not at all.
Lissa: As long as they're a certified restaurant.
Lizzy: Yeah, exactly. I think a couple times I've figured that out because I like to look at pictures, so I will always Yelp it because I just want to be able to see what I'm ordering. I think there's pros and cons. So one is for a new emerging chef or small business owner, that's way less overhead and way less risk to take on to be able to book out a commercial kitchen and get your food delivered versus have a restaurant. But the part I don't understand is, is it the same people making everything for 10 different-
Lissa: That's what I thought, right?
Lizzy: ... front interfaces?
Lissa: Because there'll be one location that has 10 different restaurants or different types of cuisines, and I'm like, "I don't know." I don't know.
Lizzy: Because that feels sketchier to me than specialists within that, that are using that kitchen like you're renting a studio or something but they're just cooking there.
Lissa: Because how many kitchens [inaudible 00:33:11] are there?
Lizzy: Then Mary trying to make food for 13 different places. And yeah, you're probably not good at all 13 of those different places, right?
Lissa: Yeah, that's what I'm saying. It made me think of... This is similar to ghost kitchens but not. But there are also delivery places that they aggregate. There's places you can pick up your food in a locker basically. So rather than have it delivered to your home-
Lizzy: Interesting.
Lissa: ... you just have it delivered to a delivery location, which has a easy... you pull up in your car, go to your locker and leave. But you're still paying pretty much, I think, the same delivery fees as to your house.
Lizzy: Yeah, that seems silly, right?
Lissa: Yeah.
Lizzy: I've also noticed that many restaurants, normally a dine-in restaurant, now have some locations that are pickup only. So I went to the one a couple of weeks ago for California Chicken Cafe and this location in the valley was only pickup. You can't go inside. It's just a kitchen and delivery and pickup only. And that's probably much cheaper both in terms of labor, staff and space. So it's an interesting evolution and I wonder how restaurants have to make that decision.
Lissa: Yeah. So this is something I was just thinking of. So in your budget, when you're thinking of how much you're going to spend on food in a given month, how are you splitting up groceries and your meal prep with eating out? Do you also break out food delivery?
Lizzy: I don't break out food delivery right now, although thinking about that, that would be interesting and maybe I will in the future just to be able to see, because I think it could be a good reality check for people. I know my mom and my brother had that experience where one time they added it all up and it was like, "Holy, shit, I spent so much on delivery this month."
Lissa: Oh, my gosh.
Lizzy: But I just do groceries and dining out. And at times it's varied, but I typically spend 100 to 120 a week on groceries when I'm meal prepping and that's making most of my food for the week. But then there's random dinners here and there, and sometimes I won't want that meal or whatever.
Lissa: I just wonder because for people who... I see this over and over again as a financial counselor is just how big food is on a person's budget typically unplanned. Because typically, you set aside a couple hundred or 500 or however much you're planning on spending on food this month, and almost 100% of the time, many people go over.
Lizzy: Go over. Yeah.
Lissa: So I think that'd be an interesting exercise to do is to figure out, at least for the food delivery side, one, how much are you paying all in? But like Liz said, comparing that to the in-store menu prices, then you take out all the delivery fees, you take out the markups and see what that difference is. Not because you have to change your behavior, but maybe in the future you might just be more motivated to take a break to go pick up this food as opposed to paying that extra $5.
Lizzy: Right. I think people usually look at dining out, including food delivery, versus making food. But there is this third option now, and it's interesting to look at. Sure, still dine out. But what is the actual cost of that convenience? Is it an extra $200 a month, $400 a month? What are you spending each month to not have to go pick something up? I think that would be really eye-opening for people.
Lissa: Yeah. Well, it's like death by 1,000 paper cuts, right?
Lizzy: Yeah.
Lissa: You won't notice. Each individual time I can easily justify to you why I ordered this one time. I had my class, I only had a 45-minute break. I had to order. I was so tired. We had no time to get groceries. I had to.
Lizzy: For sure.
Lissa: But if I look at it in aggregate, and if you tell me I'm spending $300 in delivery fees a month, I'm going to stop that immediately because I want to use that for something else.
Lizzy: Right. And then you change your habits. So it's then how do I prevent that situation where I'm so tired and have to make that decision? So for me, that's usually meal prep so that when I go home today and I'm tired because I've been working and done podcasts and dealing with my dog, my food is ready. I don't have to make that decision.
Or it's having snacks or just planning in advance often can mitigate that or setting aside, "Okay, we're going to do delivery on Fridays," so at least you have that one time that you know you don't have to think about it. But the first step is being aware of where you stand before you can make any changes.
Lissa: Yeah. Well, now that we've been talking about it, I'm not surprised of how huge an industry this is because everybody eats and culturally, the trend has become more, "What's the most convenient way I can have my meals today?"
Lizzy: Convenient way we can have everything.
Lissa: Everything.
Lizzy: And we're in a driving culture. We're generally not a walkable country in most places. I'm not surprised at all. It is interesting though, every episode we say these stats and when you're talking about billions of dollars or in this case, trillions of dollars, it can be hard to know the relative value of an industry and really place them. But this is the biggest industry we've talked about in five or six episodes.
Lissa: We haven't said trillions.
Lizzy: We haven't said trillions before. So just to put that in perspective, it's bigger than everything else we've discussed this season.
Lissa: At some point we got to do some charts to show.
Lizzy: I think that'd be helpful just to show and plot. I've been thinking about that as we read these stats like, "Oh, that's actually twice as big as this market."
Lissa: Yeah. Because I'll just be like, "Oh, 200 million industry."
Lizzy: That's big.
Lissa: That's big. What does that even mean?
Lizzy: Big one. That's a big one.
Lissa: So yeah, if you've got an idea for a food delivery app that's better than these ones, you might be able to compete in this market. I don't know.
Lizzy: And it seems to only be growing.
Lissa: Yeah.
Lizzy: Interesting.
Lissa: One thing I forgot to mention when I was talking about all my gripes with my food delivery, I am not sure if this came out of the pandemic or just in general, maybe customer complaints or maybe a policy. But do you notice now that anytime you get food delivered, there'll be stickers or staples to close your bag or whatever?
Lizzy: I think that came out of the pandemic to ensure that things were not-
Lissa: Not contaminated.
Lizzy: Not contaminated. Yeah.
Lissa: Okay. Well, thank goodness for that because it makes me feel more confident in the food delivery that it hasn't been touched or no one's eaten my food.
Lizzy: Eaten a whole bite of your ice cream.
Lissa: Yeah.
Lizzy: Man.
Lissa: I get it, another sticker or whatever is more waste. But that's something I'll easily say yes to.
Lizzy: Yeah, I got you.
Lissa: Well, I'm actually curious. I don't even know where this is going to go.
Lizzy: Let's go.
Lissa: 20 cents.
Lizzy: 20 cents.
Lissa: 20 cents is the segment of the show where both Lizzy and myself, Lissa, each get 60 seconds to give our two cents on today's topic, whether it is a net positive or a net negative. Where does 20 cents come from?
Lizzy: Because you get the opinion of two dimes y'all.
Lissa: Two dimes.
Lizzy: Two dimes.
Lissa: So today the topic is food delivery. Liz, 60 seconds on the clock. Is food delivery worth it for you?
Lizzy: All right. This is a little bit of a tricky one for me because I delineate in my head between meal delivery and grocery delivery. Grocery delivery for me is 100%, no question worth it. Absolutely, the convenience, the time I save, and really just the peace of mind of having one less thing to do on my to-do list.
Meal delivery, DoorDash, Uber Eats et cetera, I don't usually think it's worth it. In fact, even when I'm ordering it, I rarely think it's worth it, but I'll be justifying it to myself because of X, Y and Z. I more typically use it and then go pick up. So I don't know how to reconcile the two.
Lissa: This is tough. You got to give one.
Lizzy: I will say net positive because I do use them, but with those caveats.
Lissa: But leaning towards the grocery delivery side.
Lizzy: Leaning towards the grocery delivery. Yeah.
Lissa: Okay. Net positive for Liz.
Lizzy: Oh, no, that don't feel right. It's tricky, tricky, tricky, tricky.
Lissa: It's tricky, it's tricky.
Lizzy: A lot of nuance here, y'all. A lot of nuance.
Lissa: A lot of nuance. Okay.
Lizzy: What about you, Lissa P?
Lissa: Is food delivery worth it? You know what? I don't even know what I'm going to say at the end of this. I don't do grocery delivery right now. I think I did in the past a couple of times. For now, I don't need to because I like going to the grocery store. I do meal delivery when it's convenient, like last week where I had to order it for lunch every day.
But you know what? Net negative, because I don't like it. I don't like the fees, I don't like the markups. I love the convenience. Don't get me wrong. And I'm going to continue to use it here and there, but I think I'm going to make a conscious effort to use it much less because I do think I'm spending a lot on it.
Lizzy: Okay, so this brings an interesting point in our podcast that you can be net negative on something-
Lissa: But still do it.
Lizzy: ... but still do it.
Lissa: Yeah.
Lizzy: And just know that we're imperfect and we're human and everyone has slightly hypocritical moments sometimes.
Lissa: Yeah, that's hypocritical.
Lizzy: And you know you're not really all about this, but you're going to do it anyway for X, Y, Z reason.
Lissa: Yeah. Because it's weird, right? I'm still going to order food delivery probably within the next two, three weeks. It's probably going to come up.
Lizzy: Yeah, for sure.
Lissa: I'm not going to enjoy it. I'm not going to-
Lizzy: Or you're going to know it's not worth it.
Lissa: I'm going to know it's not worth it.
Lizzy: But you're going to do it anyway.
Lissa: But I'm going to do it anyway. So it happens. Yeah.
Lizzy: All right. All right, all right, that's fair.
Lissa: Good call out.
Lizzy: Yeah. I don't change my answer because of that because I do genuinely think grocery delivery is worth it, but that's an important distinction. We also talked about that on the alcohol episode. We both know it's not worth it, but did it anyway.
Lissa: Yeah, do it anyway.
Lizzy: But we were net negative.
Lissa: Interesting.
Lizzy: Keep in mind.
Lissa: Keep in mind. Again, all episodes, this is what we think at this moment in time. Hopefully, it helps you think through what you want. What do you think? Is food delivery worth it?
Lizzy: You didn't say that part. You didn't say that part.
Lissa: What did I say?
Lizzy: Nobody can make this decision.
Lissa: Oh.
Lizzy: You haven't done that the past-
Lissa: I'm struggling.
Lizzy: ... several episodes and I'm sitting here waiting.
Lissa: Okay. No one can make this decision but you. Is food delivery worth it?
Lizzy: Hit us up. Let us know what you think. DM us on Instagram @netnetpodcast or email us at hi@netnetpodcast.com. And if you want to follow us individually, here's where you can find us.
Lissa: I'm @wealthforwomenofcolor on TikTok, YouTube and Instagram.
Lizzy: And I'm @liv_well_lizzy on Instagram and TikTok.
Lissa: All references, statistics and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own damn decisions.