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Food Delivery Apps Don’t Clearly Disclose Markups

ST. GEORGE, Utah — A St. George business decided to call KSL Investigators after seeing their food prices were marked up when using a delivery app.

Thanks to the pandemic, many people have enjoyed meals from their favorite restaurant with the help of food delivery apps, like Door Dash.

Justin Egbert and his work colleagues were doing their best to help local restaurants by ordering lunch through the app. Egbert said he knew the delivery would cost them a little extra for the convenience.

“There’s a service fee,” said Egbert. “There’s also a Dasher tip that was added, which is fine.”

When the food arrived from the local restaurant, Café Sabor, there were two receipts – one from Door Dash, and one from the restaurant. Comparing the two receipts, each entrée was about 35 percent less expensive than what’s listed on the Door Dash receipt.

Egbert said the markup on food was not expected.

“The significant markup on each of the menu items, there was nowhere in the ordering process that was disclosed to us,” he said.

When KSL Investigators examined the Door Dash Terms of Service, it does say, “prices… may differ from the prices offered or published” by the actual restaurant.

A Door Dash spokesperson told KSL, “Our merchant partners control their menu pricing.”

Café Sabor’s owner, Justin Hamilton, confirmed the statement, saying, “When you sign up to be serviced by Door Dash, they charge a fee.”

He said the company charges the restaurant 28 percent of every sale.

Hamilton said already-tight profit margins means that fee ends up getting passed to the customer.

“It’s impossible for an independent restaurant to discount their food 30 percent and still meet the costs that we have survive,” Hamilton said.

The pandemic has forced Hamilton to become creative with keeping business afloat, and came up with a way to keep food prices lower but still offer delivery services.

“We’ve started co-ops with other local restaurants to be able to do our own delivery service,” he said.

Door Dash also told us they’ve been trying to help local restaurants stay afloat during the pandemic by cutting their merchant fees in half through the end of May. They have also offered no delivery fees to customers.

Have you experienced something you think just isn’t right? The KSL Investigators want to help. Submit your tip at investigates@ksl.com or 385-707-6153 so we can get working for you.

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