Third party apps and delivery services have played an important role in helping restaurants stay open during the COVID-19 pandemic. With limited dine-in options, consumers are enjoying their favorite foods at home with contactless delivery. For restaurants, the main challenge is choosing the best service that will minimize fees and provide reliable deliveries. Uber Eats for restaurants is one popular option, but Sixdots offers distinct advantages over existing services.
Uber Eats has some hefty fees
While Uber Eats provides an alternative to hiring a full-time delivery person, it does come with some drawbacks. Restaurants have to apply for the service and the company does not guarantee that it can partner with every restaurant. Perhaps more importantly, Uber Eats comes with some major fees that can decrease profits. Uber Eats charges restaurants 30% of the food price. That means if a restaurant is selling a $10 hamburger, $3 goes to Uber Eats. In addition, restaurants are prohibited from raising prices in order to cover the cost of delivery, making the price of delivery a steep one.
The fee percentage is especially worrisome considering that most restaurants operate at a profit margin well below 30%. For instance, fast food restaurants like McDonalds had a profit margin of 22% in 2017. The typical profit margin for a casual, family style restaurant is between 5 and 10% and fine dining restaurants have a margin of just 6.1%.
Restaurants also have to pay an activation fee of $350 to begin using the service. This amount includes a welcome kit, photography and tablet with ordering software. Restaurants will incur additional fees if they need technical or marketing support. On top of all that, there are credit card fees to consider.
The Bottom Line
Ultimately, most restaurants will actually lose money every time they fulfill an order through Uber Eats. More orders translate into more loss. So while Uber Eats for restaurants may be a convenient service for consumers, it may not be the right choice for businesses.
How Does Uber Eats for Restaurants Work?
The concept behind Uber Eats is actually quite simple. Consumers who use the Uber app for rideshare services, can also use the app to order food from restaurants. Once the order is placed and the food is ready, a driver picks it up from the restaurant and delivers it to the consumer. Restaurants receive weekly direct deposits with the revenue from the previous week.
One of the main advantages of using Uber Eats for restaurants is greater visibility. Having a listing with Uber Eats means that more people will be able to discover businesses. The platform can be an effective marketing tool and expand resources for smaller establishments. For some, this may be enough to justify potential profit losses. That is something that individual restaurants will have to weigh.
Advantages of using Sixdots for Restaurants
Sixdots offers an all-in-one software solution that is designed to support merchants by expanding revenue streams and minimizing person-to-person touchpoints. Patrons can scan the branded QR codes to view the menu, place orders, checkout and pay all without needing to download an app. Once an order is placed, the information is sent directly to the restaurant’s POS system so that it can be fulfilled. With the help of geolocation tools, the unique QR code for each restaurant only has to be scanned once.
Sixdots makes ordering and paying for food and cocktails easy for consumers while also offering restaurants a whole host of tools. The software includes a web-based Menu Builder, Menu Management System, Cocktail Costing Tool and a Cocktail Recipe Repository. Additionally, Sixdots’ Application Programming Interface (API) integration allows third-party technologies to communicate directly with your POS, and eliminates additional hardware and manual order input. It is a much more robust platform than Uber Eats for restaurants.
No hidden fees and no revenue share
Perhaps best of all, bars and restaurants can take advantage of Sixdots for free when partnering on a cocktail program. When a restaurant agrees to partner with a Sixdots supplier, Sixdots offsets the monthly cost of their program and services. This means no commission, marketplace or takeout fees and a 0% revenue share.
Sixdots is a unique platform that streamlines partnerships with beverage alcohol suppliers on cocktail programs, creating supplier-backed limited time offers and virtual experience opportunities for merchants to offer their guests. Consumers also enjoy transparent pricing without any hidden fees. There is no need to worry about a 30% revenue share or any other fees that can eat away at profits.
Technology is playing a key role in helping restaurants quickly adapt their business model and operate more efficiently. While Uber Eats for restaurants offers some benefits and can increase the number of delivery and takeout orders, the fees for these services can hinder profits. Sixdots addresses some of the issues associated with Uber Eats and offers a more affordable option with a robust suite of tools.
Can you use Uber Eats for any restaurant?
No, Uber Eats makes it clear that they cannot partner with every restaurant that applies.
Is Ubereats free for restaurants?
No, Uber Eats charges a 30% revenue share and restaurants aren’t allowed to increase the price of foods in order to cover Uber Eats fees. There is also a $350 activation fee and there may be additional service fees for marketing and technical support, as well as credit card fees.
How does Uber Eats work for restaurants?
Consumers can use the Uber app to order food. Once the order is fulfilled, an Uber driver will pick up the food and deliver it to the consumer. The restaurant then receives weekly direct deposits that include the revenue from the previous week.
How much does it cost to join Uber Eats for restaurants?
The base cost for joining Uber Eats is $350.
How does Sixdots for restaurants work?
Sixdots uses unique QR codes and an app to allow users to order and pay for food. The order can be sent to the restaurant’s existing POS system. This helps to streamline the takeout, delivery, dine-in and curbside orders.
Is Sixdots free for restaurants?
Yes, there is a free-version available to businesses. When a restaurant partners with a Sixdots supplier, Sixdots offsets the monthly fee so that restaurants don’t have to pay anything to use the products and services.